FIDELITY
(registered trademark)
MASSACHUSETTS
MUNICIPAL
FUNDS
SEMIANNUAL REPORT
JULY 31, 1996
INVESTMENT ADVISER
(registered trademark)
Fidelity Management & Research
Company
Boston, MA
SUB-ADVISER, MONEY MARKET FUND
FMR Texas Inc.
Irving, TX
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
Fred L. Henning., Jr., Vice President
Janice Bradburn, Vice President -
MONEY MARKET FUND
Arthur S. Loring, Secretary
Kenneth A. Rathgeber, Treasurer
Thomas D. Maher, Assistant
Vice President - MONEY MARKET FUND
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
Thomas J. Simpson, Assistant Treasurer - MONEY MARKET FUND
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox *
Phyllis Burke Davis *
Richard J. Flynn *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Marvin L. Mann *
Edward H. Malone *
Gerald C. McDonough *
Thomas R. Williams *
ADVISORY BOARD
William O. McCoy
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENTS
UMB Bank, n.a.
Kansas City, MO
and
Fidelity Service Co.
Boston, MA
CUSTODIAN
UMB Bank, n.a.
Kansas City, MO
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Account Balances 1-800-544-7544
Exchanges/Redemptions 1-800-544-7777
Mutual Fund Quotes 1-800-544-8544
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774 (8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
* INDEPENDENT TRUSTEES
AUTOMATED LINES FOR QUICKEST SERVICE
CONTENTS
CHECK PAGE NUMBERS !!!
<TABLE>
<CAPTION>
<S> <C> <C>
PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.
FIDELITY MASSACHUSETTS MUNICIPAL INCOME FUND
PERFORMANCE 4 How the fund has done over time.
FUND TALK 7 The manager's review of fund
performance, strategy and outlook.
INVESTMENT CHANGES 10 A summary of major shifts in the
fund's investments over the past six
months
and one year.
INVESTMENTS 11 A complete list of the fund's
investments with their market value.
FINANCIAL STATEMENTS 25 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.
FIDELITY MASSACHUSETTS MUNICIPAL MONEY MARKET FUND
PERFORMANCE 29 How the fund has done over time.
FUND TALK 31 The manager's review of fund
performance, strategy and outlook.
INVESTMENT CHANGES 33 A summary of major shifts in the
fund's investments over the past six
months
and one year.
INVESTMENTS 34 A complete list of the fund's
investments with their market value.
FINANCIAL STATEMENTS 40 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.
NOTES 44 Notes to the financial statements.
</TABLE>
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL
INFORMATION OF THE SHAREHOLDERS OF THE FUNDS. THIS REPORT IS NOT AUTHORIZED
FOR
DISTRIBUTION TO PROSPECTIVE INVESTORS IN THE FUNDS UNLESS PRECEDED OR
ACCOMPANIED BY
AN EFFECTIVE PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
BY, ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED.
NEITHER THE FUNDS NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY FUND, INCLUDING CHARGES AND EXPENSES,
CALL
1-800-544-8888 FOR A FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST
OR SEND
MONEY.
To reduce expenses and demonstrate respect for our environment, we have
initiated a project through which we will begin eliminating duplicate
copies of most financial reports and prospectuses to most households, even
if they have more than one account in the fund. If additional copies of
financial reports, prospectuses or historical account information are
needed, please call 1-800-544-6666.
PRESIDENT'S MESSAGE
DEAR SHAREHOLDER:
Although stocks have managed to post solid returns through the first seven
months of 1996, signs of strength in the economy have led to inflation
fears, causing some uncertainty in both the stock and bond markets so far
this year. In 1995, both stock and bond markets posted strong results,
while the year before, stocks posted below-average returns and bonds had
one of the worst years in history.
These market ups and downs are a normal part of investing, and there are
some basic principles that are helpful for investors to remember in
different types of markets.
Keeping in mind that the effects of interest rate changes on your bond
investments will only be "paper" gains or losses unless you sell your
shares, staying in your bond fund may be appropriate if your investment
horizon is at least a year or more. The longer your investing time frame,
the more likely it is that you will retain your principal investment
through both up and down markets. For example, a 10-year time frame, such
as saving for a college education, enables you to weather these ups and
downs in a long-term fund, which has higher potential returns. An
intermediate-length fund could be appropriate if your investment horizon is
two to four years, and a short-term bond fund could be the right choice if
you need your money in one or two years.
If your time horizon is less than a year, you might want to consider moving
some of your bond investment into a money market fund, which seeks income
and a stable share price by investing in high-quality, short-term
investments. Of course, there is no assurance that a money market fund will
achieve its goal, and it is important to remember that money market funds
are not insured or guaranteed by any agency of the U.S. government.
No matter what your investment horizon or portfolio diversity, it makes
good sense to follow a regular investment plan - investing a certain amount
of money at the same time each month or quarter - and to review your
portfolio periodically. A periodic investment plan will not, of course,
assure a profit or protect against a loss.
If you have any questions, please call us at 1-800-544-8888. We stand ready
to provide the information you need to make the investments that are right
for you.
Best regards,
Edward C. Johnson 3d
FIDELITY MASSACHUSETTS MUNICIPAL INCOME FUND
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. Each figure
includes changes in a fund's share price, plus reinvestment of any
dividends (or income) and capital gains (the profits the fund earns when it
sells securities that have grown in value). You can also look at the fund's
income to measure performance.
CUMULATIVE TOTAL RETURNS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
PERIODS ENDED JULY 31, 1996 PAST 6 PAST 1 PAST 5 PAST 10
MONTHS YEAR YEARS YEARS
Massachusetts Municipal Income Fund -0.80% 6.85% 42.61% 109.32%
Lehman Brothers Massachusetts Enhanc -0.32% 6.43% n/a n/a
ed
Municipal Bond Index
Massachusetts Municipal Debt Funds Average -0.63% 6.33% 42.60% 101.54%
</TABLE>
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, five years, or 10
years. For example, if you invested $1,000 in a fund that had a 5% return
over the past year, the value of your investment would be $1,050. You can
compare the fund's returns to the performance of the Lehman Brothers
Massachusetts Enhanced Municipal Bond Index, which is a total return
performance benchmark for Massachusetts investment-grade municipal bonds
with maturities of at least one year. To measure how the fund's performance
stacked up against its peers, you can compare it to the Massachusetts
municipal debt funds average, which reflects the performance of 51 mutual
funds with similar objectives tracked by Lipper Analytical Services, Inc.
over the past six months. Both benchmarks reflect investment of dividends
and capital gains, if any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED JULY 31, 1996 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
Massachusetts Municipal Income Fund 6.85% 7.36% 7.67%
Lehman Brothers Massachusetts Enhanc 6.43% n/a n/a
ed
Municipal Bond Index
Massachusetts Municipal Debt Funds Average 6.33% 7.35% 7.26%
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER 10 YEARS
IMAHDR PRASUN SHR__CHT 19960731 19960820 101937 S00000000000001
MA Muni Income LB Municipal Bond
00070 LB015
1986/07/31 10000.00 10000.00
1986/08/31 10374.48 10447.70
1986/09/30 10400.16 10473.92
1986/10/31 10568.33 10654.81
1986/11/30 10716.66 10865.88
1986/12/31 10728.35 10835.89
1987/01/31 10960.01 11162.16
1987/02/28 11043.71 11217.08
1987/03/31 11008.29 11098.18
1987/04/30 10454.17 10541.27
1987/05/31 10320.89 10488.98
1987/06/30 10498.40 10796.94
1987/07/31 10649.93 10907.07
1987/08/31 10687.54 10931.61
1987/09/30 10253.70 10528.56
1987/10/31 10116.94 10565.83
1987/11/30 10378.97 10841.71
1987/12/31 10593.22 10999.02
1988/01/31 10926.83 11390.81
1988/02/29 11052.42 11511.21
1988/03/31 10859.53 11377.68
1988/04/30 10948.01 11464.15
1988/05/31 11006.55 11431.02
1988/06/30 11125.50 11598.25
1988/07/31 11204.22 11673.87
1988/08/31 11242.72 11684.14
1988/09/30 11406.38 11895.63
1988/10/31 11612.43 12104.99
1988/11/30 11545.46 11994.11
1988/12/31 11723.63 12116.81
1989/01/31 11891.43 12367.38
1989/02/28 11813.54 12226.27
1989/03/31 11822.09 12197.05
1989/04/30 12112.54 12486.61
1989/05/31 12328.11 12745.96
1989/06/30 12433.29 12919.05
1989/07/31 12528.68 13094.88
1989/08/31 12480.08 12966.68
1989/09/30 12432.34 12928.04
1989/10/31 12550.12 13086.15
1989/11/30 12727.88 13315.15
1989/12/31 12807.67 13424.07
1990/01/31 12744.91 13360.58
1990/02/28 12902.72 13479.48
1990/03/31 12924.86 13483.53
1990/04/30 12755.16 13385.91
1990/05/31 13032.64 13678.12
1990/06/30 13169.20 13798.35
1990/07/31 13355.33 14001.19
1990/08/31 13195.12 13797.89
1990/09/30 13239.31 13805.76
1990/10/31 13284.51 14056.19
1990/11/30 13695.05 14338.86
1990/12/31 13753.44 14401.24
1991/01/31 13923.38 14594.50
1991/02/28 14030.18 14721.47
1991/03/31 14100.07 14726.77
1991/04/30 14295.50 14922.64
1991/05/31 14439.52 15055.30
1991/06/30 14468.03 15040.40
1991/07/31 14677.68 15223.59
1991/08/31 14811.40 15424.08
1991/09/30 14947.55 15624.90
1991/10/31 15080.79 15765.53
1991/11/30 15120.72 15809.51
1991/12/31 15308.34 16148.79
1992/01/31 15441.52 16185.61
1992/02/29 15490.72 16190.79
1992/03/31 15506.00 16196.78
1992/04/30 15643.71 16340.93
1992/05/31 15814.44 16533.26
1992/06/30 16077.44 16810.69
1992/07/31 16509.72 17314.67
1992/08/31 16302.02 17145.85
1992/09/30 16440.81 17257.99
1992/10/31 16163.06 17088.34
1992/11/30 16572.16 17394.39
1992/12/31 16730.27 17571.99
1993/01/31 16976.25 17776.35
1993/02/28 17560.31 18419.32
1993/03/31 17401.46 18224.63
1993/04/30 17561.36 18408.52
1993/05/31 17680.48 18511.97
1993/06/30 17959.02 18820.94
1993/07/31 17946.49 18845.59
1993/08/31 18320.97 19237.96
1993/09/30 18633.91 19457.08
1993/10/31 18679.70 19494.63
1993/11/30 18526.23 19322.88
1993/12/31 18891.98 19730.79
1994/01/31 19110.30 19956.12
1994/02/28 18710.41 19439.25
1994/03/31 17905.24 18647.69
1994/04/30 17965.58 18805.82
1994/05/31 18142.45 18968.87
1994/06/30 18057.97 18852.97
1994/07/31 18399.24 19198.54
1994/08/31 18480.23 19264.97
1994/09/30 18179.44 18982.16
1994/10/31 17813.46 18645.03
1994/11/30 17310.75 18307.93
1994/12/31 17744.56 18710.89
1995/01/31 18385.93 19245.65
1995/02/28 18900.99 19805.31
1995/03/31 19154.27 20032.87
1995/04/30 19163.56 20056.51
1995/05/31 19763.24 20696.52
1995/06/30 19458.40 20516.46
1995/07/31 19590.11 20710.95
1995/08/31 19828.09 20973.57
1995/09/30 19992.73 21106.33
1995/10/31 20318.79 21413.22
1995/11/30 20675.89 21768.46
1995/12/31 20951.24 21977.66
1996/01/31 21099.57 22143.59
1996/02/29 20879.96 21994.12
1996/03/31 20594.72 21713.03
1996/04/30 20504.18 21651.59
1996/05/31 20507.52 21642.92
1996/06/30 20708.95 21878.62
1996/07/31 20931.58 22077.71
IMATRL PRASUN SHR__CHT 19960731 19960820 101942 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was invested
in Fidelity Massachusetts Municipal Income Fund on July 31, 1986. As the
chart shows, by July 31, 1996, the value of the investment would have grown
to $20,932 - a 109.32% increase on the initial investment. For comparison,
look at how the Lehman Brothers Municipal Bond Index, which reflects the
performance of the investment-grade municipal bond market, did over the
same period. With dividends reinvested, the same $10,000 would have grown
to $22,080 - a 120.80% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is no
guarantee of how it will do
tomorrow. Bond prices, for
example, generally move in
the opposite direction of
interest rates. In turn, the
share price, return, and yield of
a fund that invests in bonds
will vary. That means if you
sell your shares during a
market downturn, you might
lose money. But if you can ride
out the market's ups and
downs, you may have a gain.
(checkmark)
TOTAL RETURN COMPONENTS
SIX YEARS ENDED JANUARY 31,
MONTHS
ENDED
JULY 31,
1996 1996 1995 1994 1993 1992
Dividend return 2.61% 6.41% 5.85% 6.32% 6.67% 7.08%
Capital appreciation
return -3.41% 8.35% -9.64% 6.25% 3.27% 3.82%
Total return -0.80% 14.76% -3.79% 12.57% 9.94% 10.90%
DIVIDEND returns and capital appreciation returns are both part of a bond
fund's total return. A dividend return reflects the actual dividends paid
by the fund. A capital appreciation return reflects both the amount paid by
the fund to shareholders as capital gain distributions and changes in the
fund's share price. Both returns assume the dividends or gains are
reinvested.
DIVIDENDS AND YIELD
<TABLE>
<CAPTION>
<S> <C> <C> <C>
PERIODS ENDED JULY 31, 1996 PAST PAST 6 PAST 1
MONTH MONTHS YEAR
Dividends per share 5.07(cents) 30.22(cents) 62.08(cents)
Annualized dividend rate 5.33% 5.37% 5.47%
30-day annualized yield 5.16% - -
30-day annualized tax-equivalent yield 9.16% - -
</TABLE>
DIVIDENDS per share show the income paid by the fund for a set period. If
you annualize this number, based on an average share price of $11.20 over
the past month, $11.29 over the past six months and $11.36 over the past
year, you can compare the fund's income over these three periods. Dividends
per share show the income paid by the fund for a set period and do not
reflect any tax reclassifications. The 30-day annualized YIELD is a
standard formula for all funds based on the yields of the bonds in the
fund, averaged over the past 30 days. This figure shows you the yield
characteristics of the fund's investments at the end of the period. It also
helps you compare funds from different companies on an equal basis. The
tax-equivalent yield shows what you would have to earn on a taxable
investment to equal the fund's tax-free yield, if you're in the 43.68%
combined 1996 federal and state tax bracket. A portion of the fund's income
may be subject to the alternative minimum tax.
FIDELITY MASSACHUSETTS MUNICIPAL INCOME FUND
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Steven Harvey, Portfolio Manager of Fidelity
Massachusetts Municipal Income Fund
Q. HOW HAS THE FUND PERFORMED, STEVE?
A. For the six-month period ended July 31, 1996, the fund had a return of
- -0.80%. This slightly trailed the Massachusetts municipal debt funds
average, which had a -0.63% return during the six-month period, according
to Lipper Analytical Services. The Lehman Brothers Massachusetts Enhanced
Municipal Bond Index posted a six-month return of -0.32%. Looking at these
comparisons over the 12-month period ended July 31, 1996, the fund provided
a return of 6.85%, while the Lipper average and Lehman Brothers
Massachusetts index had returns of 6.33% and 6.43%, respectively.
Q. WHAT WERE THE KEY FACTORS BEHIND THE FUND'S PERFORMANCE?
A. One of the factors that comes to mind is that as I began the six-month
period, we had a pretty significant underweighting in Massachusetts general
obligation bonds, particularly bonds issued by the Massachusetts Bay
Transportation Authority. With the Commonwealth showing its economic
strength and improved financial prospects during the period, Massachusetts
general obligation bonds vaulted to the head of the municipal class in
terms of performance. While these types of general obligation issues make
up nearly 30% of the Lehman Brothers Massachusetts index, the fund can
never have a full weighting in them due to standard industry
diversification guidelines.
Q. WHAT KIND OF INVESTMENT AND ECONOMIC ATMOSPHERE WERE YOU OPERATING IN
DURING THE PERIOD?
A. It was a tale of two bond markets. The first three months of the period
were disappointing for bonds as we saw various signs of the economy picking
up speed. In step with this unexpected economic growth, concern over upward
inflationary movement mounted as well. As a result of these fears, the
fixed-income market staged a significant sell-off. During the last three
months of the period, however, the market did an about-face. Interest rates
fell and investors became less concerned about the overriding strength of
the economy. There was also a sense of relief when the Federal Reserve
Board deemed it unnecessary to raise short-term interest rates when it met
in July. The municipal bond market also went through two phases. From
February to the end of April, municipals actually underperformed their
Treasury counterparts. The major culprit behind this was potential tax law
changes. In the second half of the period, municipals eventually regained
their attractiveness relative to Treasuries.
Q. WE UNDERSTAND THERE WERE SOME INVESTMENT POLICY CHANGES DURING THE
PERIOD . . .
A. Yes. As of June 24, 1996, the fund reserves the right to invest up to 5%
of its assets - down from 35% - in below-investment-grade securities. The
fund does not intend to seek out the lower-quality, below-investment-grade
bonds. Instead, this change helps the fund maintain a degree of flexibility
under unusual circumstances. Further, the fund now uses two additional
agencies to determine the credit quality of its bonds. Ratings from Duff &
Phelps Rating Co. and Fitch Investors Service, L.P., may be used, along
with those from Moody's Investors Service and Standard & Poor's that the
fund had been using previously.
Q. WERE THERE ANY INDIVIDUAL HOLDINGS THAT IMPACTED THE FUND EITHER
NEGATIVELY OR POSITIVELY?
A. In terms of disappointments, I would again point to the fund's
underweighting in Massachusetts general obligation bonds and the fact that
the fund didn't take advantage of their strong performance, unexpected as
it may have been. On the positive side, some of the fund's more solid
performers turned out to be issues that I've held for a while. One example
involves a hospital bond issuer that was involved in a merger. This past
spring, MetroWest Health Center, a BBB-rated hospital bond, was acquired by
Columbia HCA. The acquisition marked the first incursion of a for-profit
health care center into the Massachusetts marketplace. When Columbia HCA
came in and took over, MetroWest's tax-exempt securities could obviously no
longer be classified as such, and those bonds were advance-refunded. This
development provided a significant windfall for the fund.
Q. THE PROCESS OF "REFUNDING" SEEMS TO OCCUR FREQUENTLY IN THE BOND MARKET.
WHAT DOES IT MEAN WHEN AN ISSUER'S BONDS ARE REFUNDED?
A. It's basically the refinancing of the bond. When a person refinances his
or her mortgage, the old mortgage gets paid off immediately. Municipal
bonds, however, offer a unique form of protection. When a bond issuer
refunds its bonds, it is basically turning them back in and purchasing
Treasury securities. The issuer then uses the new securities to pay off the
old bonds, and the new bonds become the obligation of that issuer. If the
fund is holding a bond that gets refunded, the obligation to the issuer
essentially vanishes, and the fund is left with tax-exempt treasury
securities.
Q. HOW DID THE MASSACHUSETTS ECONOMY PERFORM OVER THE PERIOD? WERE THERE
ANY DEVELOPMENTS THAT MAY HAVE INFLUENCED YOUR INVESTING STRATEGY?
A. The economy hasn't returned to its overheated levels of the late 1980s,
but it was very strong over the course of the period. As an example, the
state's unemployment rate has been below 5% since the winter and below the
national average over the past 12 months. An increase in home sales also
contributed to the economic vitality. Of course, some of this good news has
been tempered by front-page stories concerning the downsizing at some of
the state's older technology-related firms, such as Digital and Raytheon.
Growth spurts in communications-related companies, however, have bridged
this gap. In terms of the credit quality of the state's issues,
Massachusetts currently has an A-1 rating from Moody's and an A+ rating
from Standard & Poor's.
Q. WHAT'S YOUR OUTLOOK?
A. I think the direction of interest rates over the next six months is
extremely difficult to predict. In terms of the portfolio, I'll look to
improve upon my individual security selection and try to assess which
sectors are performing best. I feel that the state's credit quality is in
line for an upgrade, so I'd like to add more state general obligation
bonds.
FUND FACTS
GOAL: to provide high current
income exempt from federal
and Massachusetts state
income taxes by investing
normally in investment-grade
municipal securities
START DATE: November 10,
1983
SIZE: as of July 31, 1996,
more than $1.1 billion
MANAGER: Steven Harvey,
since August 1995; manager,
Spartan New Jersey
Municipal Income Fund, since
May 1996; Fidelity Ohio
Municipal Income Fund, since
1994; Spartan Pennsylvania
Municipal Income Fund and
Spartan Maryland Municipal
Income Fund, since 1993;
joined Fidelity in 1986
(checkmark)
STEVEN HARVEY ON THE
IMPORTANCE OF CREDIT RESEARCH
AND ANALYSIS:
"Credit research, of course, is
always a critical factor in
determining whether to buy a
bond or not. Like anything
else, our research can work
out well or it can backfire on
us. One positive example
involves a hospital-related
bond issued by the city of
Lowell. The hospital sector is
a particularly challenging area
to navigate. We gather and
analyze as much information
on a particular issuer as
possible. At one time, three
different Lowell-based
hospitals were issuing bonds.
We looked carefully at all
three and decided to invest
only in bonds issued by Lowell
General Hospital. Since that
decision, the bonds issued by
the other two hospitals have
been downgraded to
below-investment-grade,
while the Lowell General
bonds have continued to
benefit the portfolio."
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND
OTHER CONDITIONS.
FIDELITY MASSACHUSETTS MUNICIPAL INCOME FUND
INVESTMENT CHANGES
TOP FIVE SECTORS AS OF JULY 31, 1996
% OF FUND'S % OF FUND'S INVESTMENT
INVESTMENTS S
IN THESE SECTORS
6 MONTHS AGO
General Obligation 24.1 20.2
Health Care 16.3 18.4
Education 11.7 14.6
Water & Sewer 10.9 7.7
Escrowed/Pre-Refunded 8.0 9.0
AVERAGE YEARS TO MATURITY AS OF JULY 31, 1996
6 MONTHS AGO
Years 15.3 15.3
AVERAGE YEARS TO MATURITY IS BASED ON THE AVERAGE TIME UNTIL PRINCIPAL
PAYMENTS ARE EXPECTED FROM EACH OF THE FUND'S BONDS, WEIGHTED BY DOLLAR
AMOUNT.
DURATION AS OF JULY 31, 1996
6 MONTHS AGO
Years 7.3 7.5
DURATION SHOWS HOW MUCH A BOND FUND'S PRICE FLUCTUATES WITH CHANGES IN
COMPARABLE INTEREST RATES. IF RATES RISE 1%, FOR EXAMPLE, A FUND WITH A
FIVE-YEAR DURATION IS LIKELY TO LOSE ABOUT 5% OF ITS VALUE. OTHER FACTORS
ALSO CAN INFLUENCE A BOND FUND'S PERFORMANCE AND SHARE PRICE. ACCORDINGLY,
A BOND FUND'S ACTUAL PERFORMANCE MAY DIFFER FROM THIS EXAMPLE. BEGINNING
WITH THE REPORTING CYCLE OF JUNE,1996, THE MODEL USED TO CALCULATE
DURATIONS MAY BE SLIGHTLY MODIFIED IN ORDER TO FURTHER REFINE THIS
INFORMATION. THESE CHANGES IN METHODOLOGY MAY PRODUCE ADJUSTMENTS IN
HISTORICAL DURATION FIGURES.
QUALITY DIVERSIFICATION (MOODY'S RATINGS)
AS OF JULY 31, 1996 AS OF JANUARY 31, 1996
Aaa 31.3%
Aa, A 50.3%
Baa 8.2%
Ba, B 0%
Non-rated 5.3%
Short-term
investments 4.9%
Aaa 30.3%
Aa, A 45.1%
Baa 10.0%
Ba, B 1.3%
Non-rated 7.2%
Short-term
investments 6.1%
Row: 1, Col: 1, Value: 31.3
Row: 1, Col: 2, Value: 50.3
Row: 1, Col: 3, Value: 8.199999999999999
Row: 1, Col: 4, Value: 0.0
Row: 1, Col: 5, Value: 5.3
Row: 1, Col: 6, Value: 4.9
Row: 1, Col: 1, Value: 30.3
Row: 1, Col: 2, Value: 45.1
Row: 1, Col: 3, Value: 10.0
Row: 1, Col: 4, Value: 1.3
Row: 1, Col: 5, Value: 7.2
Row: 1, Col: 6, Value: 6.1
SHOWN AS A PERCENTAGE OF THE FUND'S INVESTMENTS. WHERE MOODY'S RATINGS ARE
NOT AVAILABLE, WE HAVE USED S&P RATINGS.
FIDELITY MASSACHUSETTS MUNICIPAL INCOME FUND
INVESTMENTS JULY 31, 1996 (UNAUDITED)
Showing Percentage of Total Value of Investments
MUNICIPAL BONDS - 95.1%
MOODY'S PRINCIPAL VALUE
RATINGS (B) AMOUNT (NOTE 1)
MASSACHUSETTS - 91.0%
Amherst Gen. Oblig.:
6.50% 1/15/08 Aa $ 795,000 $ 848,662
6.50% 1/15/09 Aa 770,000 819,087
6.50% 1/15/10 Aa 750,000 795,937
Barnstable Ind. Dev. Fing. Auth. Ind. Dev. Rev.
(Whitehall Pavilion Health Proj.) 10.125%
2/15/26 (FHA Guaranteed) A 3,030,000 3,127,383
Bellingham Gen. Oblig.:
7.50% 7/1/06 (Pre-Refunded to
7/1/01 @ 103) (c) A 310,000 355,337
7.50% 7/1/07 (Pre-Refunded to
7/1/01 @ 103) (c) A 310,000 355,337
7.50% 7/1/08 (Pre-Refunded to
7/1/01 @ 103) (c) A 310,000 355,337
7.50% 7/1/09 (Pre-Refunded to
7/1/01 @ 103) (c) A 310,000 355,337
7.50% 7/1/10 (Pre-Refunded to
7/1/01 @ 103) (c) A 310,000 355,337
7.50% 7/1/11 (Pre-Refunded to
7/1/01 @ 103) (c) A 300,000 343,874
Boston Econ. Dev. & Ind. Corp. (Boston Army
Base 1983 Proj.) 6.25% 8/1/03 AA 4,700,000 4,858,624
Boston Gen. Oblig.:
Series A, 7% 2/1/00 (AMBAC Insured) Aaa 2,060,000 2,217,074
10% 7/1/00 (MBIA Insured) Aaa 1,000,000 1,186,250
Boston Gen. Oblig. Unltd. Tax Series A,
6.75% 7/1/11 (MBIA Insured) (Pre-Refunded
to 7/1/01 @ 102) (c) Aaa 2,500,000 2,768,750
Boston Hsg. Dev. Corp. Mtg. Rev. Rfdg.
Section 8, Series A, 5.15% 7/1/08
(MBIA Insured) (FHA Guaranteed) Aaa 3,275,000 3,180,843
Boston Ind. Dev. Rev. (North End Commty.
Nursing Home) 11.45% 3/15/25
(FHA Guaranteed) AA 4,820,000 5,393,820
Boston Wtr. & Swr. Commission Rev. Gen. Sr. Series A:
5.40% 11/1/08 A 1,000,000 998,750
5.25% 11/1/19 A 10,100,000 9,279,374
Bourne Gen. Oblig. Unltd. Tax (Land Acquisition Loan):
8% 12/15/04 Baa1 290,000 339,300
8% 12/15/05 Baa1 290,000 341,837
8% 12/15/06 Baa1 290,000 343,287
8% 12/15/07 Baa1 290,000 344,374
Brockton Gen. Oblig. 7.75% 12/15/96 Baa 1,500,000 1,516,080
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (B) AMOUNT (NOTE 1)
MASSACHUSETTS - CONTINUED
Brockton Hsg. Dev. Corp. Multi-Family Hsg.
Rev. Rfdg. (Douglas House Proj.) Series 1992 A
7.375% 9/1/24 (FNMA Coll.) AAA $ 8,305,000 $ 8,647,580
Chelsea School Proj. Loan Act 1948:
6.50% 6/15/12 (AMBAC Insured) Aaa 2,500,000 2,640,624
6% 6/15/14 (AMBAC Insured) Aaa 1,830,000 1,873,462
Dedham-Westwood Wtr. Dist. Rfdg.
5.10% 10/15/12 (MBIA Insured) Aaa 1,000,000 936,250
Dighton & Rehoboth Reg. School Dist.:
5.40% 5/15/10 (AMBAC Insured) Aaa 385,000 380,187
5.40% 5/15/11 (AMBAC Insured) Aaa 185,000 181,762
5.40% 5/15/12 (AMBAC Insured) Aaa 225,000 219,374
Framingham Hsg. Dev. Corp. Mtg. Rev.
(Claffin House) Series A, 6.95% 1/1/24
(FHA Guaranteed) AAA 1,820,000 1,881,424
Granville Gen. Oblig.:
7.30% 7/15/05 (MBIA Insured) Aaa 145,000 168,380
7.30% 7/15/06 (MBIA Insured) Aaa 145,000 169,105
7.30% 7/15/07 (MBIA Insured) Aaa 140,000 163,800
7.30% 7/15/08 (MBIA Insured) Aaa 140,000 163,974
Halifax Gen. Oblig.:
6.20% 6/1/10 (AMBAC Insured) Aaa 325,000 342,468
6.25% 6/1/11 (AMBAC Insured) Aaa 325,000 342,468
6.30% 6/1/12 (AMBAC Insured) Aaa 325,000 346,124
6.30% 6/1/13 (AMBAC Insured) Aaa 325,000 344,500
Haverhill Rfdg. Series A:
6.40% 9/1/03 (AMBAC Insured) Aaa 1,600,000 1,730,000
6.50% 9/1/04 (AMBAC Insured) Aaa 1,595,000 1,724,593
Holyoke Gen. Oblig.:
Series A:
5.50% 6/15/04 (FSA Insured) Aaa 1,255,000 1,283,238
6% 6/15/05 (FSA Insured) Aaa 1,350,000 1,425,938
6% 6/15/06 (FSA Insured) Aaa 1,300,000 1,369,875
5.50% 6/15/16 (FSA Insured) Aaa 2,200,000 2,145,000
Series B:
5.50% 6/15/04 (FSA Insured) Aaa 2,015,000 2,060,338
6% 6/15/06 (FSA Insured) Aaa 1,400,000 1,475,250
Holyoke School Proj. Loan Act:
7.35% 8/1/02 Baa 2,270,000 2,471,462
7.65% 8/1/09 Baa 2,205,000 2,386,913
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (B) AMOUNT (NOTE 1)
MASSACHUSETTS - CONTINUED
Hudson Ltd. Tax:
7.50% 8/15/01 A $ 215,000 $ 238,919
7.50% 8/15/02 A 215,000 237,038
7.50% 8/15/03 A 215,000 238,113
Leicester Gen. Oblig Unltd. Tax:
5% 1/15/11 (MBIA Insured) Aaa 515,000 478,950
5.10% 1/15/13 (MBIA Insured) Aaa 305,000 284,413
5.10% 1/15/14 (MBIA Insured) Aaa 500,000 462,500
Lowell Gen. Oblig.:
Rfdg. Series A, 5.50% 1/15/10 (FSA Insured) Aaa 2,000,000 1,972,500
Ltd. Tax:
6.25% 8/1/04 (AMBAC Insured) Aaa 2,035,000 2,202,888
6.25% 8/1/05 (AMBAC Insured) Aaa 2,120,000 2,297,550
8% 1/15/00 Baa1 995,000 1,092,013
5.80% 4/1/08 (FSA Insured) Aaa 1,195,000 1,235,331
8.40% 1/15/09 Aaa 1,250,000 1,421,875
7.625% 2/15/10
(Pre-Refunded to 2/15/01 @ 103) (c) Aaa 1,650,000 1,889,250
Lowell Hsg. Dev. Corp. Multi-Family Rev. Rfdg.
Series A:
7.875% 11/1/00 (FNMA Coll.) AAA 645,000 673,219
7.875% 11/1/24 (FNMA Coll.) AAA 5,440,000 5,732,400
Lynn Gen. Oblig. Rfdg.
5.25% 1/15/11 (FSA Insured) Aaa 4,570,000 4,375,775
Lynn Wtr. & Swr. Commission Rev. Rfdg.:
5.35% 12/1/07 (FGIC Insured) Aaa 760,000 760,950
5.40% 12/1/08 (FGIC Insured) Aaa 805,000 801,981
5.45% 12/1/09 (FGIC Insured) Aaa 850,000 840,438
5.50% 12/1/10 (FGIC Insured) Aaa 500,000 492,500
Massachusetts Bay Trans. Auth.:
Rfdg. (Gen. Trans. Sys.) Series A:
5.50% 3/1/09 A1 6,000,000 6,052,500
5.50% 3/1/12 A1 4,350,000 4,311,938
6.25% 3/1/12 A1 1,500,000 1,603,125
Rfdg. Series B:
6% 3/1/12 A1 7,440,000 7,663,200
6.20% 3/1/16 A1 7,000,000 7,437,500
5.50% 3/1/21 A1 8,250,000 7,847,813
(Gen. Trans. Sys.) Series A:
6.25% 3/1/05 A1 2,780,000 3,019,775
5.70% 3/1/09 A1 5,000,000 5,143,750
5.80% 3/1/11 A1 6,435,000 6,636,094
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (B) AMOUNT (NOTE 1)
MASSACHUSETTS - CONTINUED
Massachusetts Bay Trans. Auth.: - continued
(Gen. Trans. Sys.) Series A: - continued
5.80% 3/1/12 A1 $ 3,000,000 $ 3,082,500
7% 3/1/21 A1 1,500,000 1,740,000
Series B, 7.80% 3/1/10
(Pre-Refunded to 3/1/01 @ 102) (c) Aaa 6,500,000 7,442,500
Massachusetts Edl. Loan Auth. (Student Loans):
5.75% 7/1/07 (AMBAC Insured) Aaa 3,365,000 3,444,919
5.85% 7/1/08 (AMBAC Insured) Aaa 5,000,000 5,118,750
Massachusetts Gen. Oblig.:
Rfdg. Series A:
6.25% 7/1/02 A1 10,565,000 11,330,963
6.25% 7/1/03 A1 18,500,000 19,980,000
6.25% 7/1/04 A1 3,000,000 3,247,500
5.25% 2/1/08 A1 5,000,000 4,912,500
Rfdg. Series B:
5.40% 11/1/06 A1 3,750,000 3,806,250
5.40% 11/1/07 (MBIA Insured) Aaa 5,945,000 6,011,881
6.50% 8/1/08 A1 2,500,000 2,775,000
(Consolidated Loan):
Series A:
0% 6/1/97 A1 1,225,000 1,181,941
7.50% 6/1/04 A1 2,100,000 2,412,375
5.40% 11/1/06 A1 1,000,000 1,015,000
7.625% 6/1/08
(Pre-Refunded to 6/1/01 @ 102) (c) Aaa 5,000,000 5,718,750
5.50% 11/1/08 A1 5,000,000 5,062,500
5% 1/1/10 (FGIC Insured) Aaa 3,000,000 2,838,750
Series B:
0% 6/1/99 A1 2,000,000 1,755,000
0% 7/1/02 A1 12,250,000 9,126,250
Series C:
7.25% 12/1/00 (FGIC Insured) Aaa 2,000,000 2,155,000
0% 12/1/05 A1 6,500,000 3,973,125
Series D:
6.875% 7/1/10
(Pre-Refunded to 7/1/01 @ 102) (c) Aaa 1,000,000 1,113,750
5.125% 11/1/12 (FGIC Insured) Aaa 7,765,000 7,328,219
5.125% 11/1/15 (FGIC Insured) Aaa 12,500,000 11,640,625
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (B) AMOUNT (NOTE 1)
MASSACHUSETTS - CONTINUED
Massachusetts Gen. Oblig.: - continued
(Massachusetts State College Bldg.)
7.50% 5/1/05 A1 $ 3,000,000 $ 3,513,750
Massachusetts Health & Edl. Facs. Auth. Rev.:
Rfdg. (Baystate Medical Center) Series D,
5% 7/1/12 (FGIC Insured) Aaa 6,250,000 5,812,500
Rfdg. (Boston College) Series K:
5.25% 6/1/10 A1 3,025,000 2,930,469
5.375% 6/1/14 A1 10,445,000 10,014,144
5.25% 6/1/23 A1 8,000,000 7,270,000
Rfdg. (Harvard Univ.) Series P:
6.50% 11/1/05 Aaa 1,000,000 1,113,750
5.60% 11/1/14 Aaa 1,000,000 1,002,500
5.625% 11/1/28 Aaa 1,500,000 1,460,625
Rfdg. (Massachusetts Gen. Hosp.) Series F,
6.25% 7/1/12 (AMBAC Insured) Aaa 3,250,000 3,469,375
Rfdg. (Morton Hosp. & Med. Ctr.) Series B,
5.25% 7/1/08 (Connie Lee Insured) AAA 2,800,000 2,705,500
Rfdg. (Wheaton College) Series C,
5.125% 7/1/09 A 1,130,000 1,062,200
(Anna Jaques Hosp.) Series B:
5.90% 10/1/99 Baa1 930,000 938,138
6% 10/1/00 Baa1 985,000 996,081
6.875% 10/1/12 Baa1 3,250,000 3,315,000
(Baystate Med. Ctr.):
6% 7/1/04 (FSA Insured) Aaa 1,290,000 1,357,725
6% 7/1/05 (FSA Insured) Aaa 1,385,000 1,454,250
6% 7/1/06 (FSA Insured) Aaa 1,425,000 1,492,688
(Blood Institute) Series A, 6.50% 2/1/22 - 15,540,000 15,384,600
(Cape Cod Health Sys.) Series A, 5.25%
11/15/13 (Connie Lee Insured) AAA 3,500,000 3,237,500
(Cardinal Cushing Gen. Hosp.) Series A,
8.50% 7/1/00 - 700,000 707,875
(Central Med. Ctr.) Series B, 9.22% 6/23/22
(AMBAC Insured) INFL (d) Aaa 10,000,000 11,050,000
(Daughter's Charity-Carney Hosp.) Series C,
7.75% 7/1/14 (Pre-Refunded to
7/1/00 @ 102) (c) Aaa 2,300,000 2,601,875
(Emerson Hosp.) Series C, 8% 7/1/18
(Pre-Refunded to 7/1/00 @ 102) (c) Baa1 22,150,000 25,167,938
(Falmouth Hosp.) Series C, 5.50% 7/1/08
(MBIA Insured) Aaa 1,000,000 1,002,500
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (B) AMOUNT (NOTE 1)
MASSACHUSETTS - CONTINUED
Massachusetts Health & Edl. Facs. Auth. Rev.: - continued
(Faulkner Hosp.) Series C:
6% 7/1/13 Baa1 $ 9,745,000 $ 9,221,206
6% 7/1/23 Baa1 6,605,000 6,093,113
(Hebrew Rehabilitation Ctr. For Aged) Series B:
7% 7/1/97 A- 380,000 386,316
7.375% 7/1/17 A- 14,000,000 14,533,820
(Lowell Gen. Hosp.) Series A:
8.25% 6/1/00 Baa1 2,455,000 2,629,919
8.40% 6/1/11 Baa1 2,565,000 2,808,675
(Medical, Academic, & Scientific Commty.
Organizations) Series A, 6.625% 1/1/15 A- 4,150,000 4,310,813
(Mt. Auburn Hosp.) Series B-1:
6.25% 8/15/14 (MBIA Insured) Aaa 1,250,000 1,289,063
6.30% 8/15/24 (MBIA Insured) Aaa 5,000,000 5,137,500
(Notre Dame Health Care Ctr.) Series A:
7.25% 10/1/01 - 690,000 715,875
7.875% 10/1/22 - 5,000,000 5,100,000
(Simmons College) Series B, 7.50% 10/1/20 Baa1 6,190,000 6,723,888
(Tufts Univ.):
Series C, 7.40% 8/1/08 A1 1,000,000 1,073,750
6.55% 8/15/18 (FGIC Insured) INFL (d) Aaa 7,900,000 7,653,125
(Wellesley College) Series D, 5.375% 7/1/19 Aa1 12,085,000 11,495,856
(Wheaton College) Series C:
5.25% 7/1/14 A 2,655,000 2,505,656
5.25% 7/1/19 A 2,000,000 1,850,000
(Whidden Mem. Hosp.) Series B:
7.375% 7/1/98 - 490,000 502,250
7.875% 7/1/12 - 6,530,000 6,603,463
(Williams College) Series D, 5.50% 7/1/17 Aa1 4,000,000 3,870,000
Massachusetts Hsg. Fin. Agcy. Hsg. Rev:
Rfdg. Series A, 6% 12/1/13 (MBIA Insured) Aaa 5,680,000 5,715,500
(Hsg. Proj.) Series A,
6.15% 10/1/15 (AMBAC Insured) Aaa 1,000,000 1,007,500
(Single Family Hsg.) :
Series 3, 7.30% 6/1/14 Aa 6,000,000 6,152,280
Series 8, 7.70% 6/1/17 Aa 500,000 525,625
Series 10, 7.70% 12/1/17 Aa 725,000 757,625
Series 16, 7.80% 12/1/05 Aa 850,000 887,188
Series 16, 7.90% 6/1/14 Aa 860,000 899,775
6.60% 12/1/24 Aa 19,550,000 19,941,000
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (B) AMOUNT (NOTE 1)
MASSACHUSETTS - CONTINUED
Massachusetts Hsg. Fin. Agcy. Hsg. Rev: - continued
(Single Family Hsg.): - continued
6.75% 6/1/26 Aa $ 2,700,000 $ 2,791,125
6.65% 12/1/27 Aa 7,000,000 7,166,250
Massachusetts Ind. Fin. Agcy. Rev.:
Rfdg. (Atlanticare Med. Ctr.) Series B,
10.125% 11/1/14 - 8,400,000 7,990,500
Rfdg. (Chelsea Jewish Nursing Home) Series A,
11.15% 2/15/25 (FHA Guaranteed) A- 3,560,000 4,005,926
Rfdg. (Framingham Union Hosp.) Series A, 8.25%
7/1/00 (Pre-Refunded to 7/1/98 @ 102) (c) Aaa 2,445,000 2,677,275
Rfdg. (Lesley College) Series A, 6.30% 7/1/15
(Connie Lee Insured) Aaa 2,525,000 2,569,188
Rfdg. (Milton Academy) Series B, 5.25% 9/1/19
(MBIA Insured) Aaa 3,000,000 2,771,250
Rfdg. (Museum of Fine Arts, Boston):
5% 1/1/01 (MBIA Insured) Aaa 2,800,000 2,828,000
5.125% 1/1/04 (MBIA Insured) Aaa 1,150,000 1,157,188
5.375% 1/1/05 (MBIA Insured) Aaa 1,750,000 1,793,750
Rfdg. (Museum of Science Proj.):
4.90% 11/1/06 (FSA Insured) Aaa 480,000 465,000
5% 11/1/07 (FSA Insured) Aaa 515,000 498,263
5% 11/1/08 (FSA Insured) Aaa 1,590,000 1,520,438
5.10% 11/1/09 (FSA Insured) Aaa 830,000 792,650
Rfdg. (Philips Academy) 5.375% 9/1/23 Aa1 14,800,000 13,912,000
(Atlanticare Med. Ctr.) Series A,
10.125% 11/1/14 - 1,900,000 1,807,375
(Babson College) Series A:
5.60% 10/1/06 (MBIA Insured) Aaa 515,000 533,025
5.70% 11/1/07 (MBIA Insured) Aaa 545,000 563,394
(Brandon Residential Treatment Proj.)
8.75% 2/1/24 - 5,320,000 5,273,450
(Concord Academy) 6.90%
9/1/21 (FSA Insured) Aaa 1,370,000 1,467,613
(Holy Cross College) 7% 7/1/19 (Pre-Refunded
to 7/1/99 @ 101) (c) A1 9,000,000 9,720,000
(Institute Dev. Disabilities) 9.25% 6/1/09 - 4,030,000 3,949,400
(Leominster Hosp.) Series A
8.375% 8/1/99 (Escrowed to Maturity) (c) - 2,800,000 2,936,500
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (B) AMOUNT (NOTE 1)
MASSACHUSETTS - CONTINUED
Massachusetts Ind. Fin. Agcy. Rev.: - continued
(Massachusetts Biomedical/Massachusetts Gen. Hosp.):
Series A-1, 0% 8/1/02 A1 $ 3,650,000 $ 2,678,188
Series A-2:
0% 8/1/03 A1 1,000,000 677,500
0% 8/1/05 A 24,600,000 14,729,250
0% 8/1/07 A 25,000,000 12,937,500
0% 8/1/08 A 20,000,000 9,700,000
0% 8/1/10 A 10,000,000 4,200,000
(New England Ctr. for Autism) 7% 11/1/19 - 1,100,000 1,016,125
(Springfield College):
5.25% 9/15/03 Baa1 755,000 738,956
5.25% 9/15/04 Baa1 885,000 858,450
5.35% 9/15/05 Baa1 930,000 899,775
5.625% 9/15/10 Baa1 1,000,000 936,250
(Whitehead Institute Biomedical Research)
5.125% 7/1/26 Aa 14,600,000 12,811,500
Massachusetts Ind. Fin. Agcy. Poll. Cont. Rev.
(General Motors Corp.) 5.55% 4/1/09 A3 2,000,000 1,962,500
Massachusetts Muni. Wholesale Elec. Co. Pwr. Supply Sys. Rev.:
Rfdg. Series A:
5.10% 7/1/08 (AMBAC Insured) Aaa 1,000,000 968,750
6% 7/1/18 (MBIA Insured) Aaa 10,000,000 9,987,500
Rfdg. Series B:
6.625% 7/1/04 A 4,675,000 5,043,156
5% 7/1/17 (MBIA Insured) Aaa 7,710,000 6,871,538
Series A:
6.75% 7/1/08 A 3,000,000 3,191,250
8.75% 7/1/18 (Pre-Refunded to 7/1/97
@ 102) (c) Aaa 2,000,000 2,126,200
Series B:
6.75% 7/1/08 A 2,000,000 2,127,500
6.75% 7/1/17 A 9,050,000 9,547,750
Series C, 6.625% 7/1/18 A 10,000,000 10,475,000
Series D, 6% 7/1/06 A 1,000,000 1,028,750
Series E, 6% 7/1/06 A 1,640,000 1,687,150
Massachusetts Port. Auth. Rev.:
Rfdg. Series A:
5.50% 7/1/09 Aa 3,160,000 3,128,400
5% 7/1/13 Aa 8,835,000 8,028,806
Rfdg. 7.125% 7/1/12 Aa 2,490,000 2,531,907
5.625% 7/1/12 (Escrowed to Maturity) (c) Aaa 1,900,000 1,876,250
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (B) AMOUNT (NOTE 1)
MASSACHUSETTS - CONTINUED
Massachusetts Spl. Oblig. Rev. Series A:
(Gas Tax) 6% 6/1/13 A1 $ 16,195,000 $ 16,397,438
7% 6/1/02 A1 3,050,000 3,358,813
5.20% 6/1/07 (AMBAC Insured) Aaa 6,950,000 6,889,188
5.80% 6/1/14 A1 4,185,000 4,174,538
Massachusetts Tpk. Auth. Tpk. Rev. Rfdg. Series A:
5% 1/1/20 A1 16,985,000 14,819,413
5.125% 1/1/23 (FGIC Insured) Aaa 16,620,000 14,916,450
Massachusetts Wtr. Poll. Abatement Trust Rev.:
Series 1:
5.30% 2/1/05 Aa 1,000,000 1,013,750
5.40% 2/1/06 Aa 2,175,000 2,204,906
5.40% 8/1/06 Aa 2,230,000 2,260,663
5.45% 2/1/07 Aa 2,000,000 2,020,000
Series A:
6% 8/1/02 Aa 2,255,000 2,395,938
6% 8/1/03 Aa 3,450,000 3,674,250
6% 8/1/04 Aa 3,670,000 3,913,138
6% 8/1/05 Aa 1,500,000 1,597,500
Massachusetts Wtr. Resources Auth.:
Rfdg. Series B:
5.875% 11/1/04 A 1,975,000 2,076,219
6% 11/1/08 A 4,500,000 4,646,250
5% 3/1/22 A 13,000,000 11,326,250
Rfdg. Series C:
6% 12/1/11 A 2,000,000 2,087,500
4.75% 12/1/23 A 13,000,000 10,773,750
Series A:
0% 4/1/06 (MBIA Insured) Aaa 10,000,000 6,012,500
6.50% 7/15/07 A 6,000,000 6,667,500
7.50% 4/1/09
(Pre-Refunded to 4/1/00 @ 102) (c) Aaa 6,600,000 7,367,250
6.50% 7/15/09 A 1,000,000 1,103,750
7.625% 4/1/14
(Pre-Refunded to 4/1/00 @ 102) (c) Aaa 1,000,000 1,120,000
6.50% 7/15/19 A 16,960,000 18,507,600
6.50% 7/15/21
(Pre-Refunded to 7/15/02 @ 102) (c) Aaa 1,000,000 1,106,250
5.50% 7/15/22 A 2,000,000 1,875,000
Series B, 5% 12/1/16 (MBIA Insured) Aaa 5,000,000 4,531,250
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (B) AMOUNT (NOTE 1)
MASSACHUSETTS - CONTINUED
Methuen Gen. Oblig. Wtr. Ltd. Tax Lot A:
9.50% 12/15/98 A1 $ 260,000 $ 290,550
9.50% 12/15/99 A1 260,000 300,625
9.50% 12/15/00 A1 260,000 308,425
Monson Gen. Oblig. Rfdg. 5.50% 10/15/10
(MBIA Insured) Aaa 1,080,000 1,066,500
Nantucket Island Bank Rfdg. Series E,
7.25% 7/1/19 A 6,175,000 6,738,469
New England Ed. Loan Marketing Corp.(Student Loan):
Rfdg. Series A, 5.70% 7/1/05 (f) A1 4,750,000 4,785,625
Series A, 5.80% 3/1/02 Aaa 12,035,000 12,456,225
North Attleborough Gen. Oblig. Ltd. Tax Rfdg.
5.25% 11/1/13 (AMBAC Insured) Aaa 1,000,000 952,500
Orleans Gen. Oblig. Unltd. Tax:
6.70% 6/15/08 A1 180,000 191,475
6.70% 6/15/09 A1 120,000 127,500
Pentucket Reg. School Dist. Gen. Oblig.:
5.10% 2/15/11 (MBIA Insured) Aaa 530,000 498,863
5.10% 2/15/12 (MBIA Insured) Aaa 220,000 207,900
5.10% 2/15/13 (MBIA Insured) Aaa 575,000 537,625
5.10% 2/15/14 (MBIA Insured) Aaa 525,000 483,656
Pittsfield Gen. Oblig. 7.25% 8/1/06
(Pre-Refunded to 8/1/96 @ 103) (c) A 600,000 618,000
Plainville Gen. Oblig. Ltd. Tax:
7% 9/1/05 A 175,000 186,813
7% 9/1/06 A 175,000 186,813
7% 9/1/07 A 175,000 186,813
Plymouth County Ctfs. of Prtn. Series A,
7% 4/1/22 A- 10,995,000 11,970,806
Quabbin Reg. School Dist. 6.80% 6/15/05 A 510,000 538,688
Quincy Hosp. Rev.:
Rfdg. 5.25% 1/15/16 (FSA Insured) Aaa 2,000,000 1,855,000
5.30% 1/15/11 (FSA Insured) Aaa 11,400,000 10,758,750
South Essex Swr. Dist. Gen. Oblig.:
Rfdg. Series A:
6% 6/15/03 (MBIA Insured) Aaa 2,390,000 2,548,338
6% 6/15/04 (MBIA Insured) Aaa 2,375,000 2,535,313
6% 6/15/05 (MBIA Insured) Aaa 1,175,000 1,254,313
6% 6/15/06 (MBIA Insured) Aaa 2,305,000 2,457,706
Rfdg. Series B, 7% 6/1/24 (MBIA Insured)
(Pre-Refunded to 6/1/04 @ 102) (c) Aaa 1,000,000 1,153,750
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (B) AMOUNT (NOTE 1)
MASSACHUSETTS - CONTINUED
South Essex Swr. Dist. Gen. Oblig.: - continued
Ltd. Tax:
8.75% 12/1/01
(Pre-Refunded to 12/1/00 @ 103) (c) Baa1 $ 425,000 $ 503,094
8.75% 12/1/02
(Pre-Refunded to 12/1/00 @ 103) (c) Baa1 425,000 503,094
8.75% 12/1/03
(Pre-Refunded to 12/1/00 @ 103) (c) Baa1 400,000 473,500
8.75% 12/1/04
(Pre-Refunded to 12/1/00 @ 103) (c) Baa1 400,000 473,500
8.75% 12/1/05
(Pre-Refunded to 12/1/00 @ 103) (c) Baa1 400,000 473,500
Southern Berkshire Reg. School Dist.
7% 4/15/11 (MBIA Insured) Aaa 4,000,000 4,520,000
Springfield Hsg. Auth. Multi-Family Mtg. Rev.
(Citywide Apts.):
9.50% 11/1/05 (FHA Guaranteed) - 420,000 442,050
9.625% 11/1/17 (FHA Guaranteed) - 1,500,000 1,593,750
9.625% 11/1/26 (FHA Guaranteed) - 3,250,000 3,453,125
Taunton Gen. Oblig.:
8% 2/1/00 A 1,000,000 1,096,250
8% 2/1/05 A 1,000,000 1,183,750
Taunton Ind. Dev. Fing. Rev. Rfdg. (Pepsi Cola Metro
Bottle Co.) 5.65% 8/1/12 A1 2,400,000 2,401,440
Tewksbury Gen. Oblig. Various Purpose Unltd. Tax:
9.60% 12/15/98 A 595,000 655,244
9.60% 12/15/99 A 595,000 674,581
9.60% 12/15/00 A 210,000 244,650
9.60% 12/15/01 A 210,000 248,850
9.60% 12/15/02 A 210,000 254,888
Tewksbury Wtr. Rev.:
7.20% 6/1/05 A 350,000 385,438
7.20% 6/1/06 A 150,000 166,500
Westfield Muni. Purpose Loan Rev.:
5% 9/1/10 (FSA Insured) Aaa 745,000 700,300
5% 9/1/11 (FSA Insured) Aaa 640,000 596,800
5% 9/1/12 (FSA Insured) Aaa 745,000 688,194
5% 9/1/13 (FSA Insured) Aaa 750,000 686,250
Winchedon Unltd. Tax (School Proj. Loan)
6.05% 3/15/12 (AMBAC Insured) Aaa 1,275,000 1,318,031
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (B) AMOUNT (NOTE 1)
MASSACHUSETTS - CONTINUED
Woods Hole, Martha's Vineyard & Nantucket
(Massachusetts Steamship Auth.) Series A:
5.125% 3/1/11 A1 $ 1,100,000 $ 1,042,250
5.125% 3/1/12 A1 630,000 589,838
Worcester Gen. Oblig. 5.50% 7/1/03
(MBIA Insured) Aaa 3,430,000 3,537,188
987,359,801
PUERTO RICO - 4.0%
Puerto Rico Commonwealth Gen. Oblig. Rfdg.:
Series B, 5.50% 7/1/05 (MBIA Insured) Aaa 7,330,000 7,632,363
3% 7/1/06 (MBIA Insured) Aaa 10,000,000 8,475,000
Puerto Rico Commonwealth Hwy. & Trans. Auth. Hwy. Rev.:
Series S, 6.50% 7/1/22
(Pre-Refunded to 7/1/02 @ 101.50) (c) Baa1 2,500,000 2,768,750
Series T, 6.50% 7/1/22
(Pre-Refunded to 7/1/02 @ 101.50) (c) Baa1 1,540,000 1,705,550
Series Y, 5.50% 7/1/36 Baa1 5,300,000 4,915,750
Puerto Rico Elec. Pwr. Auth. Rev. Rfdg.
Series W, 6.50% 7/1/05 (MBIA Insured) Aaa 9,410,000 10,421,575
Puerto Rico Ind. Med. & Environmental Poll.
Cont. Facs. Fing. Auth. Rev. (Motorola, Inc.)
Series A, 6.75% 1/1/14 Aa3 1,500,000 1,595,625
Puerto Rico Ports Auth. Spl. Facs.
(American Airlines) Series A, 6.25% 6/1/26 Baa3 6,575,000 6,558,563
44,073,176
GUAM - 0.1%
Guam Pwr. Auth. Rev. Series A,
5.25% 10/1/23 BBB 665,000 564,419
TOTAL MUNICIPAL BONDS
(Cost $1,002,977,825) 1,031,997,396
MUNICIPAL NOTES (A) - 4.9%
MASSACHUSETTS - 4.8%
Boston Wtr. & Swr. Commission Participating
VRDN, Series 1996 SG-75, 3.70%
(Liquidity Facility Societe Generale) (e) A-1+ 1,000,000 1,000,000
Massachusetts Gen. Oblig. (Dedicated Income Tax
Bonds Updates First Recovery Loan) Series 1990 B,
3.55%, LOC National Westminster Bank
PLC, VRDN VMIG 1 5,000,000 5,000,000
MUNICIPAL NOTES (A) - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (B) AMOUNT (NOTE 1)
MASSACHUSETTS - CONTINUED
Massachusetts Gen. Oblig. Participating
VRDN, Series 30-I, 3.70%
(Liquidity Facility Citibank) (e) A-1+ $ 1,000,000 $ 1,000,000
Massachusetts Health & Edl. Facs. Auth.
Participating VRDN, Series SG-27, 3.70%
(Liquidity Facility Societe Generale) (e) - 1,000,000 1,000,000
Massachusetts Health & Edl. Facs. Auth. Rev., VRDN:
(Boston Univ.) 3.65%, LOC
Landesbank Hessen-Thuringen P-1 1,000,000 1,000,080
(Capital Asset Prog.):
Series A, 3.30%,
LOC First Nat'l. Bank of Chicago - 1,000,000 1,000,000
Series E, 3.60%,
LOC First National Bank of Chicago VMIG 1 9,900,000 9,900,000
(Harvard Univ.) Series I, 3.50% VMIG 1 13,970,000 13,970,000
(Williams College) Series E, 3.30%, A-1+ 1,000,000 1,000,000
Massachusetts Ind. Fin. Agcy. Poll. Cont. Rev. Bond
(New England Power Co. Proj.) Series 93-B,
3.45%, tender 8/28/96 VMIG 1 800,000 799,968
Massachusetts Muni. Wholesale Elec. Co. Pwr.
Supply Sys. Rev. Series 1994 C, 3.60%,
LOC Canadian Imperial Bank of
Commerce, VRDN VMIG 1 2,000,000 2,000,000
Massachusetts Port Auth. Rev. Series 1995 B,
3.70%, LOC Landesbank
Hessen-Thuringen, VRDN (f) VMIG 1 6,975,000 6,975,000
Massachusetts Wtr. Resources Auth., CP:
3% 8/6/96, LOC Morgan Guaranty Trust Co. P-1 4,000,000 3,999,760
3.65% 10/17/96,
LOC Morgan Guaranty Trust Co. P-1 1,000,000 1,000,530
3.65% 10/22/96,
LOC Morgan Guaranty Trust Co. P-1 1,000,000 1,000,220
3.65% 10/24/96,
LOC Morgan Guaranty Trust Co. P-1 1,000,000 1,000,230
51,645,788
PUERTO RICO - 0.1%
Puerto Rico Gov't. Dev. Bank
3.15% 8/1/96, CP A-1+ 1,300,000 1,300,000
TOTAL MUNICIPAL NOTES
(Cost $52,945,000) 52,945,788
TOTAL INVESTMENTS - 100%
(Cost $1,055,922,825) $ 1,084,943,184
SECURITY TYPE ABBREVIATIONS
CP - Commercial Paper
INFL - Inverse Floating Rate Security
VRDN - Variable Rate Demand Notes
LEGEND
(a) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
(b) Standard & Poor's Corporation credit ratings are used in the absence of
a rating by Moody's Investors Service, Inc.
(c) Security collateralized by an amount sufficient to pay interest and
principal.
(d) Coupon is inversely indexed to a floating interest rate. The price will
be more volatile than the price of a comparable fixed rate security. The
rate shown is the rate at period end.
(e) Provides evidence of ownership in one or more underlying municipal
bonds.
(f) Private activity obligations whose interest is subject to the federal
alternative minimum tax for individuals.
INCOME TAX INFORMATION
At July 31, 1996, the aggregate cost of invest- ment securities for income
tax purposes was $1,055,956,463. Net unrealized appreciation aggregated
$28,986,721, of which $37,116,995 related to appreciated investment
securities and $8,130,274 related to depreciated investment securities.
At January 31, 1996, the fund was required to defer $8,722,394 of losses on
futures contracts.
At January 31, 1996, the fund had a capital loss carryforward of
approximately $6,001,487 which will expire on January 31, 2004.
OTHER INFORMATION
The composition of long-term debt holdings as a percentage of total value
of investment in securities, is as follows (ratings are unaudited):
MOODY'S RATINGS S&P RATINGS
Aaa, Aa, A 71.2% AAA, AA, A 76.3%
Baa 8.2% BBB 5.4%
Ba 0.0% BB 0.6%
B 0.0% B 0.0%
Caa 0.0% CCC 0.0%
Ca, C 0.0% CC, C 0.0%
D 0.0%
The percentage not rated by either S&P or Moody's amounted to 5.3%. FMR has
determined that unrated debt securities that are lower quality account for
1.8% of the total value of investment in securities.
The distribution of municipal securities by revenue source, as a percentage
of total value of investment in securities, is as follows:
General Obligation 24.1%
Health Care 16.3
Education 11.7
Water & Sewer 10.9
Escrowed/Pre-Refunded 8.0
Housing 6.6
Electric Revenue 6.0
Others
(individually less than 5%) 16.4
TOTAL 100.0%
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
JULY 31, 1996 (UNAUDITED)
ASSETS
Investment in securities, at value (cost $1,055,922,825) $ 1,084,943,184
- - See accompanying schedule
Receivable for investments sold 22,836,904
Interest receivable 12,968,600
TOTAL ASSETS 1,120,748,688
LIABILITIES
Payable to custodian bank $ 190,361
Payable for investments purchased 5,669,680
Payable for fund shares redeemed 721,731
Distributions payable 1,250,451
Accrued management fee 362,953
Other payables and accrued expenses 199,558
TOTAL LIABILITIES 8,394,734
NET ASSETS $ 1,112,353,954
Net Assets consist of:
Paid in capital $ 1,099,828,716
Accumulated undistributed net realized gain (loss) on (16,495,121)
investments
Net unrealized appreciation (depreciation) on 29,020,359
investments
NET ASSETS, for 98,445,385 shares outstanding $ 1,112,353,954
NET ASSET VALUE, offering price and redemption price $11.30
per share ($1,112,353,954 (divided by) 98,445,385 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED JULY 31, 1996 (UNAUDITED)
INTEREST INCOME $ 32,739,119
EXPENSES
Management fee $ 2,217,902
Transfer agent, accounting and custodian fees 938,908
and expenses
Non-interested trustees' compensation 2,320
Registration fees 26,390
Audit 20,149
Legal 8,740
Miscellaneous 7,908
Total expenses before reductions 3,222,317
Expense reductions (5,586) 3,216,731
NET INTEREST INCOME 29,522,388
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities 1,731,268
Futures contracts (3,273,406) (1,542,138)
Change in net unrealized appreciation (depreciation) on:
Investment securities (38,744,216)
Futures contracts 80,040 (38,664,176)
NET GAIN (LOSS) (40,206,314)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ (10,683,926)
FROM OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS YEAR ENDED
ENDED JANUARY 31,
JULY 31, 1996 1996
(UNAUDITED)
INCREASE (DECREASE) IN NET ASSETS
Operations $ 29,522,388 $ 64,915,620
Net interest income
Net realized gain (loss) (1,542,138) (2,335,384)
Change in net unrealized appreciation (depreciation) (38,664,176) 90,778,780
NET INCREASE (DECREASE) IN NET ASSETS RESULTING (10,683,926) 153,359,016
FROM OPERATIONS
Distributions to shareholders (29,522,388) (65,116,860)
From net interest income
From net realized gain (100,210) -
TOTAL DISTRIBUTIONS (29,622,598) (65,116,860)
Share transactions 105,873,066 303,978,166
Net proceeds from sales of shares
Reinvestment of distributions 22,562,077 48,817,732
Cost of shares redeemed (145,982,088) (307,011,398)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING (17,546,945) 45,784,500
FROM SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS (57,853,469) 134,026,656
NET ASSETS
Beginning of period 1,170,207,423 1,036,180,767
End of period $ 1,112,353,954 $ 1,170,207,423
OTHER INFORMATION
Shares
Sold 9,353,234 26,960,428
Issued in reinvestment of distributions 1,997,776 4,312,969
Redeemed (12,941,252) (27,152,538)
Net increase (decrease) (1,590,242) 4,120,859
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
SIX MONTHS YEARS ENDED JANUARY 31, SIX MONTHS YEARS ENDED
ENDED ENDED JULY 31,
JULY 31, 1996 JANUARY 31,
(UNAUDITED) 1996 1995 1994 C 1993 1992 1991
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA
Net asset value, beginning of period $ 11.700 $ 10.800 $ 12.210 $ 11.750 $ 11.860 $ 11.320 $ 11.160
Income from Investment Operations .302 .652 .700 .714 .364 .735 .783
Net interest income
Net realized and unrealized gain
(loss) (.399) .902 (1.180) .720 (.040) .620 .270
Total from investment operations (.097) 1.554 (.480) 1.434 .324 1.355 1.053
Less Distributions (.302) (.654)E (.700) (.714) (.364) (.735) (.783)
From net interest income
From net realized gain (.001) - (.230) (.230) (.070) (.080) (.110)
In excess of net realized gain - - - (.030) - - -
Total distributions (.303) (.654) (.930) (.974) (.434) (.815) (.893)
Net asset value, end of period $ 11.300 $ 11.700 $ 10.800 $ 12.210 $ 11.750 $ 11.860 $ 11.320
TOTAL RETURN B (0.80)% 14.76% (3.79) 12.57% 2.83% 12.48% 9.90%
%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000
omitted) $ 1,112,354 $ 1,170,207 $ 1,036,181 $ 1,387,410 $ 1,262,596 $ 1,235,407 $ 842,179
Ratio of expenses to average net
assets .58% .55% .54% .54% .55% A .57% .56%
A
Ratio of expenses to average net
assets after .58% .54% .54% .54% .55% A .57% .56%
expense reductions A D
Ratio of net interest income to
average net assets 5.30% 5.80% 6.29% 5.93% 6.19% A 6.43% 7.05%
A
Portfolio turnover rate 55% 33% 22% 40% 42% A 18% 29%
A
</TABLE>
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C EFFECTIVE FEBRUARY 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION 93-2,
"DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF INCOME,
CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT COMPANIES."
AS A RESULT, NET INTEREST INCOME PER SHARE MAY REFLECT CERTAIN
RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
D FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES
WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES (SEE NOTE 5 OF
NOTES TO FINANCIAL STATEMENTS).
E THE AMOUNT SHOWN REFLECTS CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO
TAX DIFFERENCES (SEE NOTE 1 OF NOTES TO FINANCIAL STATEMENTS).
FIDELITY MASSACHUSETTS MUNICIPAL MONEY MARKET FUND
PERFORMANCE: THE BOTTOM LINE
To measure a money market fund's performance, you can look at either total
return or yield. Total return reflects the change in a fund's share price
over a given period and reinvestment of its dividends (or income). Yield
measures the income paid by a fund. Since a money market fund tries to
maintain a $1 share price, yield is an important measure of performance.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED JULY 31, 1996 PAST 6 PAST 1 PAST 5 PAST 10
MONTHS YEAR YEARS YEARS
Massachusetts Municipal Money Market 1.39% 2.97% 13.16% 42.68%
Massachusetts Tax-Free 1.40% 3.00% 13.93% n/a
Money Market Funds Average
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, five years or 10
years. For example, if you invested $1,000 in a fund that had a 5% return
over the past year, the value of your investment would be $1,050. To
measure how the fund's performance stacked up against its peers, you can
compare it to the Massachusetts tax-free money market funds average, which
reflects the performance of 10 Massachusetts tax-free money market funds
with similar objectives tracked by IBC Financial Data, Inc. over the past
six months. (The periods covered by IBC Financial Data, Inc. numbers are
the closest available match to those covered by the fund.)
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED JULY 31, 1996 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
Massachusetts Municipal Money Market 2.97% 2.50% 3.62%
Massachusetts Tax-Free 3.00% 2.64% n/a
Money Market Funds Average
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.
YIELDS
7/31/95 10/30/95 1/29/96 4/29/96 7/29/96
Massachusetts Municipal 3.11% 3.16% 2.69% 3.06% 2.96%
Money Market
Massachusetts 3.15% 3.22% 2.77% 3.09% 2.92%
Tax-Free Money Market
Funds Average
Massachusetts Municipal 5.52% 5.61% 4.78% 5.43% 5.26%
Money Market Tax-equivalen
t
YIELD refers to the income paid by the fund over a given period. Yields for
money market funds are usually for seven-day periods, expressed as annual
percentage rates. A yield that assumes income earned is reinvested or
compounded is called an effective yield. The chart above shows the fund's
seven-day yield at quarterly intervals over the past year. You can compare
these yields to the Massachusetts tax-free money market funds average as
tracked by IBC Financial Data, Inc. Or you can look at the fund's
tax-equivalent yield, which is based on a combined effective 1996 federal
and state income tax rate of 43.68%. A portion of the fund's income may be
subject to the alternative minimum tax.
A MONEY MARKET FUND'S TOTAL RETURNS AND YIELDS WILL VARY, AND REFLECT PAST
RESULTS RATHER THAN PREDICT FUTURE PERFORMANCE.
COMPARING
PERFORMANCE
Yields on tax-free investments
are usually lower than yields
on taxable investments.
However, a straight
comparison between the two
may be misleading because it
ignores the way taxes reduce
taxable returns. Tax-equivalent
yield - the yield you'd have to
earn on a similar taxable
investment to match the
tax-free yield - makes the
comparison more meaningful.
Keep in mind that the U.S.
Government neither insures
nor guarantees a money
market fund. And there is no
assurance that a money fund
will maintain a $1 share price.
(checkmark)
FIDELITY MASSACHUSETTS MUNICIPAL MONEY MARKET FUND
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Jan Bradburn, Portfolio Manager of Fidelity Massachusetts
Municipal Money Market Fund
NOTE TO SHAREHOLDERS: Diane McLaughlin became portfolio manager of the fund
on August 1, 1996
Q. JAN, HOW HAS THE INVESTMENT CLIMATE CHANGED DURING THE PAST SIX MONTHS?
A. The prevailing mood among market participants underwent a dramatic shift
since January. When the current reporting period began, the economy was
expanding slowly, inflationary pressures were mild, and prospects for a
balanced budget agreement between Congress and the White House looked
encouraging. On January 31, 1996, the Federal Reserve Board had lowered the
rate banks charge each other for overnight loans, known as the federal
funds rate, one-quarter percentage point, to 5.25%. It was the third rate
cut since July 1995. Given the sluggish performance of the economy, many
believed that further rate cuts would be needed in order to avoid a
recession.
Q. WHEN DID THE MOOD OF MARKET PARTICIPANTS BEGIN TO SHIFT?
A. Almost immediately. In mid-February, Fed Chairman Alan Greenspan,
testifying before the Senate Banking Committee, suggested that the economy
was performing better than expected. That seemed to reduce the likelihood
of further rate cuts. Then came the infamous February employment report,
which showed new jobs being created at a rate four times greater than
analysts' expectations. That sent interest rates sharply higher. As it
turned out, the economy expanded at an annualized rate of 2.2% during the
first quarter - very close to the Fed's target pace for sustainable,
non-inflationary growth. Throughout the spring and early summer, a stream
of positive economic indicators pushed interest rates steadily higher. Not
surprisingly, the estimated second-quarter growth rate was even faster, at
4.2%.
Q. WHAT WAS YOUR STRATEGY DURING THE PERIOD?
A. The fund's average maturity at the beginning of the period was 51 days,
which I would characterize as neutral. Often when interest rates are
falling, I think it makes sense to lock in current rates by extending the
fund's average maturity. However, I wanted to preserve some flexibility in
the face of a fast-changing market. In retrospect, that served the fund
well when rates began climbing. I didn't extend the fund's average maturity
until after the February employment report came out in early March. As
often happens with the release of dramatic news, the market overreacted,
creating buying opportunities among longer-term securities. Purchase of
these securities brought the fund's average maturity to close to 60 days,
where it remained through the end of the period.
Q. HOW DID THE FUND PERFORM?
A. The fund's seven-day yield on July 31, 1996 was 2.97%, compared to 2.69%
six months ago. On an after-tax basis, that was the equivalent of a 5.27%
taxable rate for Massachusetts investors in the 43.68% combined state and
federal income tax bracket. Through July 31, 1996, the fund's six-month
total return was 1.39%, compared to 1.40% for the Massachusetts tax-free
money market funds average, according to IBC Financial Data, Inc.
Q. WHAT'S THE OUTLOOK?
A. Recent signs suggest that the economy is stronger than expected,
decreasing the possibility of further rate cuts and creating additional
buying opportunities for the fund. The fund's average maturity will be
contingent upon the types of opportunities available in the market.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND
OTHER CONDITIONS.
FUND FACTS
GOAL: to provide high current
income exempt from federal
and Massachusetts state
income taxes while
maintaining a stable $1.00
share price
START DATE: November 11,
1983
SIZE: as of July 31, 1996
more than $842 million
MANAGER: Janice Bradburn
since January 1992;
manager, various Fidelity
and Spartan state municipal
money market funds; joined
Fidelity in 1989
(checkmark)
FIDELITY MASSACHUSETTS MUNICIPAL MONEY MARKET FUND
INVESTMENT CHANGES
MATURITY DIVERSIFICATION
DAYS % OF FUND ASSETS % OF FUND ASSETS % OF FUND ASSETS
7/31/96 1/31/96 7/31/95
0 - 30 73 68 78
31 - 90 8 7 7
91 - 180 2 17 4
181 - 397 17 8 11
WEIGHTED AVERAGE MATURITY
7/31/96 1/31/96 7/31/95
Massachusetts Municipal
Money Market 60 days 51 days 49 days
Massachusetts Tax-Free
Money Market Funds
Average* 58 days 52 days 48 days
ASSET ALLOCATION
AS OF JULY 31, 1996 AS OF JANUARY 31, 1996
Row: 1, Col: 1, Value: 57.0
Row: 1, Col: 2, Value: 19.0
Row: 1, Col: 3, Value: 2.0
Row: 1, Col: 4, Value: 19.0
Row: 1, Col: 5, Value: 3.0
Row: 1, Col: 1, Value: 57.0
Row: 1, Col: 2, Value: 18.0
Row: 1, Col: 3, Value: 2.0
Row: 1, Col: 4, Value: 19.0
Row: 1, Col: 5, Value: 4.0
Variable rate
demand notes
(VRDNs) 57%
Commercial
paper 19%
Tender bonds 2%
Municipal
notes 19%
Other 3%
Variable rate
demand notes
(VRDNs) 57%
Commercial
paper 18%
Tender bonds 2%
Municipal
notes 19%
Other 4%
* SOURCE: IBC'S MONEY FUND REPORT(registered trademark)
FIDELITY MASSACHUSETTS MUNICIPAL MONEY MARKET FUND
INVESTMENTS JULY 31, 1996 (UNAUDITED)
Showing Percentage of Total Value of Investments
MUNICIPAL SECURITIES (A) - 100%
PRINCIPAL VALUE
AMOUNT (NOTE 1)
MASSACHUSETTS - 98.5%
Andover BAN 4% 12/20/96 $ 3,100,000 $ 3,104,083
Attleboro BAN 4% 2/6/97 1,525,000 1,527,681
Attleboro Gen. Oblig. Bonds 6.80% 12/1/96
(AMBAC Insured) 1,000,000 1,010,048
Bedford Gen. Oblig. Bonds 4.50% 12/15/96 970,000 973,511
Boston Gen. Oblig. Bonds Series 1995 A, 5% 10/1/96
(MBIA insured) 2,000,000 2,003,750
Boston Wtr. & Swr. Commission Gen. Rev., VRDN:
Series 1985 A, 3.10%, LOC Canadian
Imperial Bank of Commerce 9,130,000 9,130,000
Series 1985 B, 3.10%, LOC Canadian
Imperial Bank of Commerce 17,250,000 17,250,000
Series 1994 A, 3.25%, LOC State Street Bank & Trust Co 15,500,000
15,500,000
Boston Wtr. & Swr. Participating VRDN, Series 1996 SG-75,
3.70% (Liquidity Facility Societe Generale) (c) 7,380,000 7,380,000
Boxborough BAN 4.50% 7/11/97 4,300,000 4,323,366
Braintree BAN 3.90% 12/20/96 1,435,000 1,436,515
Bridgewater BAN 4% 11/19/96 2,400,000 2,402,137
Brockton BAN 4.40% 4/11/97 (BPA Fleet Nat'l. Bank) 5,600,000 5,620,719
Cambridge Gen. Oblig. Bonds Series 1996, 4.25% 6/15/97 1,000,000
1,003,366
Chelmsford BAN 4.25% 4/24/97 1,700,000 1,705,637
Clipper Participating VRDN, Series 93-2, 3.56%
(Liquidity Facility State Street Bank & Trust Co.) (c) 19,000,000
19,000,000
Danvers BAN 4.50% 7/18/97 4,000,000 4,014,773
Edgartown BAN:
3.75% 8/6/96 1,300,000 1,300,061
4.25% 8/6/96 750,000 750,081
Framingham Gen. Oblig. Bonds 5% 3/15/97 1,325,000 1,338,192
Framingham Ind. Rev. Board (Perini Corp. Proj.) Series 1985,
3.65%, LOC Harris Trust & Savings Bank, Chicago, VRDN 400,000 400,000
Holyoke Poll. Cont. Rev. (Holyoke Pwr. & Light Proj.) Series
1988, 3.30%, LOC Union Bank of Switzerland, VRDN 1,200,000 1,200,000
Hopkinton Gen. Oblig. Bonds 7% 7/1/97 (AMBAC Insured) 765,000 785,903
Mashpee BAN:
3.75% 2/7/97 1,500,000 1,500,327
4% 2/7/97 4,500,000 4,506,777
Massachusetts Bay Trans. Auth.:
Bonds:
Series 1988 A, 7.30% 3/1/97 1,030,000 1,049,652
Series 1989 A, 6.75% 3/1/97 2,500,000 2,543,243
RAN:
Series 1995 B, 4.75% 9/6/96 24,100,000 24,117,569
Series 1996 A, 3.75% 2/28/97 14,500,000 14,495,401
Massachusetts Bay Trans. Auth. Series C, 3.60% 10/16/96,
LOC Westdeutsche Landesbank, CP 1,500,000 1,500,000
Massachusetts Ed. Fin. Auth. Ed. Loan Rev. Series 1996 E,
3.35%, VRDN (b) 23,000,000 23,000,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
MASSACHUSETTS - CONTINUED
Massachusetts Gen. Oblig. Participating VRDN (c):
Series 1996 SG-38, 3.70%
(Liquidity Facility Societe Generale) $ 3,000,000 $ 3,000,000
Series 30-I, 3.70% (Liquidity Facility Citibank) 3,000,000 3,000,000
Series 93-I, 3.72% (Liquidity Facility Citibank)
(BPA CS First Boston Corp.) 13,000,000 13,000,000
Series CR-147, 3.72% (Liquidity Facility Citibank) 5,000,000 5,000,000
Series CR-159, 3.67% (Liquidity Facility Citibank) 6,200,000 6,200,000
Massachusetts Gen. Oblig. BAN Series 1996 A,
4.25% 6/10/97 37,700,000 37,814,608
Massachusetts Health & Ed. Facs. Auth. Bonds:
(Boston Univ.) Series H, 3.65%, tender 8/22/96,
LOC Landesbank Hessen-Thuringen 11,800,000 11,800,000
(Harvard Univ.):
3.65%, tender 9/18/96 1,700,000 1,700,000
3.60%, tender 10/21/96 3,000,000 3,000,000
Massachusetts Health & Ed. Facs. Auth. Participating VRDN,
Series SG-27, 3.70% (Liquidity Facility Societe Generale) (c) 6,500,000
6,500,000
Massachusetts Health & Ed. Facs. Auth. Rev., VRDN:
(Capital Asset Prog.):
Series A, 3.30%, LOC First Nat'l. Bank of Chicago 18,500,000
18,500,000
Series E, 3.60%, LOC First Nat'l Bank of Chicago 7,500,000 7,500,000
Series 1985 D, 3.70% (MBIA Insured)
(BPA Credit Suisse) 13,200,000 13,200,000
(Harvard Univ.) Series I, 3.50% 48,340,000 48,340,000
(Mount Ida College) 3.40%, LOC Chemical Bank 3,800,000 3,800,000
(Newton-Wellesley Hosp.) 3.25% (MBIA Insured)
(BPA Credit Suisse) 10,500,000 10,500,000
(Wellesley College) Series B, 3.25% 2,100,000 2,100,000
(Williams College) Series E, 3.30% 6,000,000 6,000,000
Massachusetts Hsg. Fin. Agcy.:
Multi-Family Rev., VRDN:
Rfdg. Series 1995 A:
3.45% (BPA Republic Bank of New York) 54,155,000 54,155,000
3.45% (FNMA Guaranteed) 200,000 200,000
(Princeton Crossing Proj.) Series 1996, 3.65%,
LOC General Elec. Cap. Corp. (b) 13,700,000 13,700,000
Participating VRDN (c):
Series 13-C, 3.40% (Liquidity Facility
Morgan Guaranty Trust Co.) 5,900,000 5,900,000
Series PA-83, 3.75% (Liquidity Facility
Merrill Lynch & Co.) (b) 5,920,000 5,920,000
Series PT-33, 3.70% (Liquidity Facility
Banque Nationale de Paris) (b) 5,180,000 5,180,000
Series PT-42, 3.55% (Liquidity Facility Commerzbank) 5,080,000
5,080,000
Single Family Hsg. Rev. Bonds Series 50, 3.70%,
tender 6/2/97 (Bayerische Landesbank Guaranteed) 3,300,000 3,300,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
MASSACHUSETTS - CONTINUED
Massachusetts Ind. Fin. Agcy. Ind. Dev. Rev., VRDN:
Rfdg.:
(First Healthcare Corp. Proj.):
Series 1992 A, 3.65%, LOC Wachovia Bank of Georgia $ 2,025,000 $
2,025,000
Series 1993 B, 3.65%, LOC Wachovia Bank of Georgia 700,000 700,000
3.65%, LOC Wachovia Bank of Georgia 2,000,000 2,000,000
(Falmouth Assisted Living) Series 1995, 3.35%, LOC
First Nat'l. Bank of Boston 3,800,000 3,800,000
(Interpolymer Corp.) Series 1992, 3.70%,
LOC First Nat'l. Bank of Boston (b) 3,600,000 3,600,000
(KMS Companies) 3.60%, LOC State Street
Bank & Trust (b) 2,500,000 2,500,000
(Longview Fiber Co.) Series 1987, 3.70%,
LOC ABN-AMRO Bank 2,070,000 2,070,000
(Nova Realty) Series 1994, 3.55%, LOC First Nat'l.
Bank of Boston 2,900,000 2,900,000
(Quamco Inc. Proj.) Series 1988 B, 3.35%,
LOC Bank of Nova Scotia 1,200,000 1,200,000
(Signature Mondial Inc.) Series 1996, 3.60%,
LOC Fleet Nat'l. Bank (b) 3,700,000 3,700,000
(United Medical Corp.) Series 1992, 3.55%,
LOC Bank of Nova Scotia (b) 1,400,000 1,400,000
(Hampshire College Proj.) 3.30%, LOC Nat'l.
Westminster Bank 935,000 935,000
(Hazen Paper Proj.) Series 1996, 3.70%, LOC First Nat'l.
Bank of Boston (b) 1,700,000 1,700,000
(Univ. LLC) Series 1996, 3.70%, LOC First Nat'l.
Bank of Boston (b) 2,200,000 2,200,000
Massachusetts Ind. Fin. Agcy. Participating VRDN,
Series 1996 SG-56, 3.70% (Liquidity Facility
Societe Generale) (c) 8,100,000 8,100,000
Massachusetts Ind. Fin. Agcy. Rev., VRDN:
Rfdg. (WGBH Ed. Foundation Proj.) Series 1992, 3.40%,
LOC Nat'l. Westminster Bank 4,495,000 4,495,000
(Bradford College) Series 1995 A, 3.50%, LOC First
Nat'l. Bank of Boston 1,000,000 1,000,000
(Edgewood Retirement Commty.) Series 1995 C, 3.50%,
LOC Dresdner Bank A.G., Germany 4,500,000 4,500,000
(General Signal Proj.) 3.50%, LOC Wachovia
Bank of Georgia 7,500,000 7,500,000
(Riverdale Mills Corp.) Series 1995, 3.70%,
LOC First Nat'l. Bank of Boston (b) 4,100,000 4,100,000
(Mary Ann Morse Nursing Home):
Series A, 3.80%, LOC ABN-AMRO Bank 6,000,000 6,000,000
Series B, 3.25%, LOC ABN-AMRO Bank 7,000,000 7,000,000
(Wheelock College) Series A, 3.35%,
LOC Nat'l. Westminster Bank 4,600,000 4,600,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
MASSACHUSETTS - CONTINUED
Massachusetts Ind. Fin. Agcy. Poll. Cont. Rev.:
Rfdg. Bonds (New England Pwr. Co. Proj.):
Series 1992 B:
3.55%, tender 8/14/96 $ 2,000,000 $ 2,000,000
3.55%, tender 9/11/96 1,000,000 1,000,000
3.50%, tender 9/12/96 2,900,000 2,900,000
3.70%, tender 10/22/96 3,000,000 3,000,000
Series 1993 A:
3.60%, tender 8/12/96 4,000,000 4,000,000
3.65%, tender 8/14/96 1,700,000 1,700,000
3.60%, tender 8/16/96 5,900,000 5,900,000
Series 1993 B:
3.60%, tender 8/12/96 4,800,000 4,800,000
3.60%, tender 8/13/96 1,700,000 1,700,000
3.65%, tender 8/14/96 4,600,000 4,600,000
3.50%, tender 8/26/96 6,300,000 6,300,000
3.40%, tender 8/27/96 2,000,000 2,000,000
3.45%, tender 8/28/96 2,000,000 2,000,000
3.65%, tender 8/30/96 1,300,000 1,300,000
(Holyoke Wtr. Pwr. Co. Proj.) Series 1990, 3.55%,
LOC Swiss Bank, VRDN (b) 8,700,000 8,700,000
Massachusetts Ind. Fin. Agcy. Resource Recovery Rev.
(Ogden-Haverhill Proj.) VRDN (b):
Series 1986 B, 3.30%, LOC Union Bank of Switzerland 7,475,000
7,475,000
Series 1992 A, 3.25%, LOC Union Bank of Switzerland 9,900,000
9,900,000
Massachusetts Muni. Wholesale Elec. Co. Pwr. Supply Sys. Rev:
Bonds Series A, 8.75% 7/1/97 8,740,000 9,285,145
Series 1994 C, 3.60%, LOC Canadian Imperial
Bank of Commerce, VRDN 17,100,000 17,100,000
Massachusetts Port Auth. Rev., VRDN:
Series 1995 A, 3.55%, LOC Landesbank Hessen-Thuringen 4,000,000
4,000,000
Series 1995 B, 3.70%, LOC Landesbank Hessen-Thuringen (b) 2,700,000
2,700,000
Massachusetts Port Auth. Series 1996, 3.65% 2/26/97,
LOC Canadian Imperial Bank of Commerce, CP 27,100,000 27,100,000
Massachusetts Tpk. Auth. Participating VRDN, Series PA-1009,
3.55% (Liquidity Facility Merrill Lynch & Co.) (c) 4,020,000 4,020,000
Massachusetts Wtr. Poll. Abatement Rev. Bonds
(New Bedford Loan Prog.) Series 1996 A, 4.25% 2/1/97 3,300,000 3,309,137
Massachusetts Wtr. Resource Auth., CP:
3.10% 8/6/96, LOC Morgan Guaranty Trust Co. 2,700,000 2,700,000
3.65% 8/7/96, LOC Morgan Guaranty Trust Co. 5,400,000 5,400,000
3.65% 8/8/96, LOC Morgan Guaranty Trust Co. 8,000,000 8,000,000
3.60% 8/13/96, LOC Morgan Guaranty Trust Co. 5,400,000 5,400,000
3.40% 8/15/96, LOC Morgan Guaranty Trust Co. 2,700,000 2,700,000
3.50% 8/15/96, LOC Morgan Guaranty Trust Co. 5,000,000 5,000,000
3.70% 8/15/96, LOC Morgan Guaranty Trust Co. 2,500,000 2,500,000
3.60% 8/16/96, LOC Morgan Guaranty Trust Co. 3,500,000 3,500,000
3.60% 8/20/96, LOC Morgan Guaranty Trust Co. 2,600,000 2,600,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
MASSACHUSETTS - CONTINUED
Massachusetts Wtr. Resource Auth., CP: - continued
3.60% 8/23/96, LOC Morgan Guaranty Trust Co. $ 6,200,000 $ 6,200,000
3.50% 8/27/96, LOC Morgan Guaranty Trust Co. 3,500,000 3,500,000
3.55% 8/28/96, LOC Morgan Guaranty Trust Co. 6,500,000 6,500,000
3.65% 10/17/96, LOC Morgan Guaranty Trust Co. 2,000,000 2,000,000
3.65% 10/22/96, LOC Morgan Guaranty Trust Co. 7,000,000 7,000,000
3.65% 10/24/96, LOC Morgan Guaranty Trust Co. 5,600,000 5,600,000
3.65% 10/29/96, LOC Morgan Guaranty Trust Co. 7,750,000 7,750,000
Massachusetts Wtr. Resource Auth. Participating VRDN (c):
Series 1995 SG-17, 3.70%
(Liquidity Facility Societe Generale) 4,200,000 4,200,000
Series 1996 SG-63, 3.70%
(Liquidity Facility Societe Generale) 1,000,000 1,000,000
Methuen BAN 3.70% 12/6/96 1,500,000 1,500,502
Milford Gen Oblig. Bonds 6.60% 12/15/96 (AMBAC Insured) 684,000 691,421
Natick BAN:
4% 8/8/96 3,700,000 3,700,254
4.50% 8/8/97 (d) 5,400,000 5,431,158
New Bedford BAN 4.50% 10/11/96 (BPA Fleet Nat'l. Bank) 2,500,000
2,503,804
Northampton BAN 4.10% 5/30/97 3,700,000 3,711,819
Northborough Ind. Rev. (Tru Realty Corp. Proj./ Toys "R" Us, Inc.)
3.775%, LOC Bankers Trust Company, VRDN 2,900,000 2,900,000
Peabody BAN 3.70% 12/12/96 1,000,000 1,000,343
Pioneer Valley RAN 4.25% 8/9/96, LOC State Street
Bank & Trust Co. 10,000,000 10,000,514
Springfield BAN:
4.25% 8/30/96 (BPA Fleet Nat'l. Bank) 2,100,000 2,101,230
4.25% 2/14/97 (BPA Fleet Nat'l. Bank) 3,300,000 3,307,739
Uxbridge Township BAN 3.73% 12/20/96 1,211,600 1,212,181
Walpole BAN 4% 6/4/97 3,395,000 3,404,081
Westfield BAN 4.20% 9/26/1996 1,224,000 1,224,907
Worcester BAN 4.25% 8/29/96, LOC State Street Bank &
Trust Co. 12,300,000 12,302,243
821,618,878
PUERTO RICO - 1.5%
Puerto Rico Commonwealth Participating VRDN, Series PT-63,
3.40% (Liquidity Facility Bayerische Hypotheken) (c) 5,200,000 5,200,000
Puerto Rico Elec. Pwr. Auth. Rev. Participating VRDN,
Series BT-105, 3.525% (Liquidity Facility Bankers Trust Co.) (c) 3,060,000
3,060,000
Puerto Rico Gov't. Dev. Bank 3.65% 9/25/96, CP 4,500,000 4,500,000
12,760,000
TOTAL INVESTMENTS - 100% $ 834,378,878
Total Cost for Income Tax Purposes $ 834,379,519
SECURITY TYPE ABBREVIATIONS
BAN - Bond Anticipation Notes
CP - Commercial Paper
RAN - Revenue Anticipation Notes
VRDN - Variable Rate Demand Notes
LEGEND
(a) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
(b) Private activity obligations whose interest is subject to the federal
alternative minimum tax for individuals.
(c) Provides evidence of ownership in one or more underlying municipal
bonds.
(d) Security purchased on a delayed delivery basis. (See Note 2 of Notes to
Financial Statements).
INCOME TAX INFORMATION
At January 31, 1996, the fund had a capital loss carryforward of
approximately $30,000 of which $17,000 and $13,000 will expire on January
31, 1998 and 2003, respectively.
FIDELITY MASSACHUSETTS MUNICIPAL MONEY MARKET FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
JULY 31, 1996 (UNAUDITED)
ASSETS
Investment in securities, at value - $ 834,378,878
See accompanying schedule
Cash 4,544,916
Receivable for investments sold 4,002,230
Interest receivable 5,766,383
TOTAL ASSETS 848,692,407
LIABILITIES
Payable for investments purchased
Delayed delivery $ 5,431,158
Distributions payable 52,903
Accrued management fee 282,196
Other payables and accrued expenses 183,225
TOTAL LIABILITIES 5,949,482
NET ASSETS $ 842,742,925
Net Assets consist of:
Paid in capital $ 842,812,943
Accumulated net realized gain (loss) on investments (70,579)
Unrealized gain from accretion of market discount 561
NET ASSETS, for 842,715,032 shares outstanding $ 842,742,925
NET ASSET VALUE, offering price and redemption price $1.00
per share ($842,742,925 (divided by) 842,715,032 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED JULY 31, 1996 (UNAUDITED)
INTEREST INCOME $ 14,478,893
EXPENSES
Management fee $ 1,712,231
Transfer agent, accounting and custodian fees 801,966
and expenses
Non-interested trustees' compensation 2,865
Registration fees 9,965
Audit 15,428
Legal 6,044
Miscellaneous 2,944
Total expenses before reductions 2,551,443
Expense reductions (1,210) 2,550,233
NET INTEREST INCOME 11,928,660
REALIZED AND UNREALIZED GAIN (LOSS) (43,450)
Net realized gain (loss) on investment securities
Increase (decrease) in net unrealized gain from 561
accretion
of market discount
NET GAIN (LOSS) (42,889)
NET INCREASE IN NET ASSETS RESULTING $ 11,885,771
FROM OPERATIONS
STATEMENT OF CHANGES IN NET ASSETS
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS YEAR ENDED
ENDED JANUARY 31,
JULY 31, 1996 1996
(UNAUDITED)
INCREASE (DECREASE) IN NET ASSETS
Operations $ 11,928,660 $ 24,555,579
Net interest income
Net realized gain (loss) (43,450) 105,241
Increase (decrease) in net unrealized gain 561 (3,861)
from accretion of market discount
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 11,885,771 24,656,959
FROM OPERATIONS
Distributions to shareholders from net interest income (11,928,660) (24,555,579)
Share transactions at net asset value of $1.00 per share 1,248,859,229 2,141,149,830
Proceeds from sales of shares
Reinvestment of distributions from net interest income 11,590,027 23,734,269
Cost of shares redeemed (1,265,153,594) (2,074,423,938)
NET INCREASE (DECREASE) IN NET ASSETS AND SHARES (4,704,338) 90,460,161
RESULTING FROM SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS (4,747,227) 90,561,541
NET ASSETS
Beginning of period 847,490,152 756,928,611
End of period $ 842,742,925 $ 847,490,152
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
SIX MONTHS YEARS ENDED JANUARY 31, SIX MONTHS YEARS ENDED
ENDED ENDED JULY 31,
JULY 31, JANUARY 31,
1996
(UNAUDITED) 1996 1995 1994 1993 1992 1991
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA
Net asset value, beginning of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
Income from Investment Operations .014 .032 .023 .017 .010 .029 .046
Net interest income
Less Distributions (.014) (.032) (.023) (.017) (.010) (.029) (.046)
From net interest income
Net asset value, end of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
TOTAL RETURN B 1.39% 3.20% 2.29% 1.71% .99% 2.94% 4.70%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 842,743 $ 847,490 $ 756,929 $ 610,154 $ 584,939 $ 600,945 $ 714,567
Ratio of expenses to average net assets .59% .60% .63% .66% .64% A .65% .60%
A
Ratio of net interest income to average net
assets 2.77% 3.15% 2.28% 1.69% 1.96% A 2.93% 4.60%
A
</TABLE>
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
NOTES TO FINANCIAL STATEMENTS
For the period ended July 31, 1996 (Unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Massachusetts Municipal Income Fund (the income fund) and Fidelity
Massachusetts Municipal Money Market Fund (the money market fund) are funds
of Fidelity Massachusetts Municipal Trust (the trust). The trust is
registered under the Investment Company Act of 1940, as amended (the 1940
Act), as an open-end management investment company organized as a
Massachusetts business trust. Each fund is authorized to issue an unlimited
number of shares. The financial statements have been prepared in conformity
with generally accepted accounting principles which permit management to
make certain estimates and assumptions at the date of the financial
statements. The following summarizes the significant accounting policies of
the funds:
SECURITY VALUATION.
INCOME FUND. Securities are valued based upon a computerized matrix system
and/or appraisals by a pricing service, both of which consider market
transactions and dealer-supplied valuations. Short-term securities maturing
within sixty days of their purchase date are valued either at amortized
cost or original cost plus accrued interest, both of which approximate
current value. Securities for which quotations are not readily available
are valued at their fair value as determined in good faith under
consistently applied procedures under the general supervision of the Board
of Trustees.
MONEY MARKET FUND. As permitted under Rule 2a-7 of the 1940 Act, and
certain conditions therein, securities are valued initially at cost and
thereafter assume a constant amortization to maturity of any discount or
premium.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, each fund is not subject to income taxes to
the extent that it distributes substantially all of its taxable income for
the fiscal year. The schedules of investments include information regarding
income taxes under the caption "Income Tax Information."
INTEREST INCOME. Interest income, which includes amortization of premium
and accretion of original issue discount, is accrued as earned. For the
money market fund, accretion of market discount represents unrealized gain
until realized at the time of a security disposition or maturity.
EXPENSES. Most expenses of the trust can be directly attributed to a fund.
Expenses which cannot be directly attributed are apportioned between the
funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS.
Dividends are declared daily and paid monthly from net interest income.
Distributions to shareholders from realized capital gains on investments,
if any, are recorded on the ex-dividend date.
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences, which may result in distribution
reclassifications, are primarily due to differing treatments for
gains/losses on futures and options transac-
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
DISTRIBUTIONS TO SHAREHOLDERS - CONTINUED
tions, capital loss carryforwards and losses deferred due to futures and
options and excise tax regulations. Permanent book and tax basis
differences relating to shareholder distributions will result in
reclassifications to paid in capital and may affect the per-share
allocation between net investment income and realized and unrealized gain
(loss). Any taxable gain remaining at fiscal year end is distributed in the
following year.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
2. OPERATING POLICIES.
FUTURES CONTRACTS AND OPTIONS. The income fund may use futures and options
contracts to manage its exposure to the bond market and to fluctuations in
interest rates. Buying futures, writing puts, and buying calls tend to
increase the fund's exposure to the underlying instrument. Selling futures,
buying puts, and writing calls tend to decrease the fund's exposure to the
underlying instrument, or hedge other fund investments. Losses may arise
from changes in the value of the underlying instruments, if there is an
illiquid secondary market for the contracts, or if the counterparties do
not perform under the contracts' terms.
Futures contracts are valued at the settlement price established each day
by the board of trade or exchange on which they are traded. Options traded
on an exchange are valued using the last sale price or, in the absence of a
sale, the last offering price. Options traded over-the-counter are valued
using dealer-supplied valuations.
DELAYED DELIVERY TRANSACTIONS. Each fund may purchase or sell securities on
a when-issued or forward commitment basis. Payment and delivery may take
place a month or more after the date of the transaction. The price of the
underlying securities and the date when the securities will be delivered
and paid for are fixed at the time the transaction is negotiated. The
market value of the securities purchased or sold on a when-issued or
forward commitment basis are identified as such in the fund's schedule of
investments. Each fund may receive compensation for interest forgone in the
purchase of a delayed delivery security. Losses may arise due to changes in
the market value of the underlying securities or if the counterparty does
not perform under the contract.
3. PURCHASES AND SALES OF INVESTMENTS.
INCOME FUND. Purchases and sales of securities, other than short-term
securities, aggregated $293,721,017 and $315,667,665, respectively.
The market value of futures contracts opened and closed during the period
amounted to $150,642,703 and $182,533,726, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As each fund's investment adviser, Fidelity Management &
Research Company (FMR) receives a monthly fee that is calculated on the
basis of a group fee rate plus a fixed individual fund fee rate applied to
the average net assets of each fund. The group fee rate is the weighted
average of a series of rates and is based on the monthly average net assets
of all the mutual funds advised by FMR. The rates ranged from .1100% to
.3700% for the period. In the event that these rates were lower than the
contractual rates in effect during the period, FMR voluntarily implemented
the above rates, as they resulted in the same or a lower management fee.
The annual individual fund fee rate is .25%. For the period, the management
fees were equivalent to annualized rates of .40% of average net assets for
the income and money market funds.
SUB-ADVISER FEE. As the money market fund's investment sub-adviser, FMR
Texas Inc., a wholly owned subsidiary of FMR, receives a fee from FMR of
50% of the management fee payable to FMR. The fee is paid prior to any
voluntary expense reimbursements which may be in effect.
DISTRIBUTION AND SERVICE PLAN. Pursuant to the Distribution and Service
Plans (the Plans), and in accordance with Rule 12b-1 of the 1940 Act, FMR
or the funds' distributor, Fidelity Distributors Corporation (FDC), an
affiliate of FMR, may use their resources to pay administrative and
promotional expenses related to the sale of each fund's shares. Subject to
the approval of each Board of Trustees, the Plans also authorize payments
to third parties that assist in the sale of each fund's shares or render
shareholder support services. No payments were made to third parties under
the Plans during the period.
TRANSFER AGENT AND ACCOUNTING FEES. UMB Bank, n.a. (UMB) is the custodian
and transfer and shareholder servicing agent for the funds. UMB has entered
into a sub-contract with Fidelity Service Co. (FSC), an affiliate of FMR,
under which FSC performs the activities associated with the funds' transfer
and shareholder servicing agent and accounting functions. The funds pay
account fees and asset-based fees that vary according to account size and
type of account. FSC pays for typesetting, printing and mailing of all
shareholder reports, except proxy statements. The accounting fee is based
on the level of average net assets for the month plus out-of-pocket
expenses. For the period, FSC received transfer agent and accounting fees
amounting to $707,184 and $192,825 for the income fund and $708,319 and
$67,072 for the money market fund, respectively.
For the period, the transfer agent fees were equivalent to an annualized
rate of .13% and .17% of average net assets for the income fund and the
money market fund, respectively.
MONEY MARKET FUND. Shareholders participating in the Fidelity Ultra Service
Account(registered trademark) Program (the Program) pay a $5.00 monthly fee
to Fidelity Brokerage
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES -
CONTINUED
MONEY MARKET FUND - CONTINUED
Services, Inc. (FBSI), an affiliate of FMR, for performing services
associated with the Program. For the period, fees paid to FBSI by
shareholders participating in the Program amounted to $57,915.
5. EXPENSE REDUCTIONS.
Each fund has entered into arrangements with its custodian and transfer
agent whereby interest earned on uninvested cash balances was used to
offset a portion of each fund's expenses. During the period, the custodian
and transfer agent fees were reduced by $0 and $5,586 and $0 and $1,210 for
the income and money market funds, respectively, under these arrangements.
SPARTAN(registered trademark)
(registered trademark)
MASSACHUSETTS
MUNICIPAL
MONEY MARKET
FUND
SEMIANNUAL REPORT
JULY 31, 1996
CONTENTS
CHECK PAGE NUMBERS !!!
PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.
PERFORMANCE 4 How the fund has done over time.
FUND TALK 6 The manager's review of fund
performance, strategy and outlook.
INVESTMENT CHANGES 8 A summary of major shifts in the
fund's investments over the past six
months
and one year.
INVESTMENTS 9 A complete list of the fund's
investments with their market value.
FINANCIAL STATEMENTS 15 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.
NOTES 19 Notes to the financial statements.
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL
INFORMATION OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED
FOR
DISTRIBUTION TO PROSPECTIVE INVESTORS IN THE FUND UNLESS PRECEDED OR
ACCOMPANIED BY
AN EFFECTIVE PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
BY, ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED.
NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY FUND, INCLUDING CHARGES AND EXPENSES,
CALL
1-800-544-8888 FOR A FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST
OR SEND
MONEY.
To reduce expenses and demonstrate respect for our environment, we have
initiated a project through which we will begin eliminating duplicate
copies of most financial reports and prospectuses to most households, even
if they have more than one account in the fund. If additional copies of
financial reports, prospectuses or historical account information are
needed, please call 1-800-544-6666.
PRESIDENT'S MESSAGE
DEAR SHAREHOLDER:
Although stocks have managed to post solid returns through the first seven
months of 1996, signs of strength in the economy have led to inflation
fears, causing some uncertainty in both the stock and bond markets so far
this year. In 1995, both stock and bond markets posted strong results,
while the year before, stocks posted below-average returns and bonds had
one of the worst years in history.
These market ups and downs are a normal part of investing, and there are
some basic principles that can help investors in every type of market.
First, take a long-term approach when investing. If you can afford to leave
your money invested through the inevitable ups and downs of financial
markets, you will greatly reduce your vulnerability to any single decline.
Over time, for example, stock prices have gone up - and have significantly
outperformed other types of investments and stayed ahead of inflation.
Second, you can further manage risk by diversifying your investments. A
stock mutual fund is already diversified, because it invests in many
different companies. You can increase your diversification by investing in
a number of different stock funds, or in different investment categories,
such as bonds. You should also keep money you'll need in the near future in
a more stable investment.
Finally, it makes good sense to follow a regular investment plan, investing
a set amount of money at the same time each month or quarter. That way, you
can avoid getting caught up in the excitement of a rapidly-rising market -
and won't end up buying all your shares at market highs. This strategy
won't assure a profit or protect you from a loss in a declining market, but
it should help you lower the average cost of your purchases. For this to be
effective, you must continue to buy shares in both up and down markets.
If you have questions, please call us at 1-800-544-8888. We would be happy
to send you a Fidelity FundMatch kit, which can help you determine the mix
of investments that is right for you. You might also find it convenient to
set up a regular investment plan using the Fidelity Automatic Account
Builder.SM
We look forward to hearing from you.
Best regards,
Edward C. Johnson 3d
PERFORMANCE: THE BOTTOM LINE
To measure a money market fund's performance, you can look at either total
return or yield. Total return reflects the change in a fund's share price
over a given period, reinvestment of its dividends (or income), and the
effect of the fund's $5 account closeout fee on an average size account.
Yield measures the income paid by a fund. Since a money market fund tries
to maintain a $1 share price, yield is an important measure of performance.
If Fidelity had not reimbursed certain fund expenses, the past five years
and life of fund total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED JULY 31, 1996 PAST 6 PAST 1 PAST 5 LIFE OF
MONTHS YEAR YEARS FUND
Spartan Massachusetts Municipal 1.44% 3.09% 14.61% 16.57%
Money Market Fund
Massachusetts Tax-Free Money Market 1.40% 3.00% 13.93% 14.95%
Funds Average
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, five years, or
since the fund started on March 4, 1991. For example, if you invested
$1,000 in a fund that had a 5% return over the past year, the value of your
investment would be $1,050. To measure how the fund's performance stacked
up against its peers, you can compare it to the Massachusetts tax-free
money market funds average, which reflects the performance of 10
Massachusetts tax-free money market funds with similar objectives tracked
by IBC Financial Data, Inc. over the past six months. (The periods covered
by the IBC Financial Data, Inc. numbers are the closest available match to
those covered by the fund.)
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED JULY 31, 1996 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
Spartan Massachusetts Municipal 3.09% 2.76% 2.87%
Money Market Fund
Massachusetts Tax-Free Money Market 3.00% 2.64% 2.64%
Funds Average
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.
YIELDS
7/31/95 10/30/95 1/29/96 4/29/96 7/29/96
Spartan Massachusetts 3.22% 3.28% 2.82% 3.21% 3.01%
Municipal Money Market
Fund
Massachusetts 3.15% 3.22% 2.77% 3.09% 2.92%
Tax-Free Money Market
Funds Average
Spartan Massachusetts 5.72% 5.82% 5.01% 5.70% 5.34%
Municipal Money
Fund - Tax-equivalent
YIELD refers to the income paid by the fund over a given period. Yields for
money market funds are usually for seven-day periods, expressed as annual
percentage rates. A yield that assumes income earned is reinvested or
compounded is called an effective yield. The chart above shows the fund's
current seven-day yield at quarterly intervals over the past year. You can
compare these yields to the Massachusetts tax-free money market funds
average. Or you can look at the fund's tax-equivalent yield, which is based
on a combined effective 1996 federal and state income tax rate of 43.68%.
Figures for the Massachusetts tax-free money market funds average are from
IBC Financial Data, Inc. A portion of the fund's income may be subject to
the alternative minimum tax.
A MONEY MARKET FUND'S TOTAL RETURNS AND YIELDS WILL VARY, AND REFLECT PAST
RESULTS RATHER THAN PREDICT FUTURE PERFORMANCE.
COMPARING
PERFORMANCE
Yields on tax-free
investments are usually lower
than yields on taxable
investments. However, a
straight comparison between
the two may be misleading
because it ignores the way
taxes reduce taxable returns.
Tax-equivalent yield - the
yield you'd have to earn on a
similar taxable investment to
match the tax-free yield -
makes the comparison more
meaningful. Keep in mind that
the U.S. government neither
insures nor guarantees a
money market fund. In fact,
there is no assurance that a
money market fund will
maintain a $1 share price.
(checkmark)
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Jan Bradburn, Portfolio Manager of Spartan Massachusetts
Municipal Money Market Fund
NOTE TO SHAREHOLDERS: Diane McLaughlin became portfolio manager of the fund
on August 1, 1996
Q. JAN, HOW HAS THE INVESTMENT CLIMATE CHANGED DURING THE PAST SIX MONTHS?
A. The prevailing mood among market participants underwent a dramatic shift
during the period. When the period began, the economy was expanding slowly,
inflationary pressures were mild and prospects for a balanced budget
agreement between Congress and the White House looked encouraging. On
January 31, 1996, the Federal Reserve Board lowered the rate banks charge
each other for overnight loans, known as the federal funds rate,
one-quarter percentage point to 5.25%. It was the third rate cut since July
1995. Given the sluggish performance of the economy, many believed that
further rate cuts would be needed in order to avoid a recession.
Q. WHEN DID THE MOOD OF MARKET PARTICIPANTS BEGIN TO SHIFT?
A. Almost immediately. In mid-February, Fed Chairman Alan Greenspan,
testifying before the Senate Banking Committee, suggested that the economy
was performing better than expected. That seemed to reduce the likelihood
of further rate cuts. Then came the infamous February employment report,
which showed new jobs being created at a rate four times greater than
analysts' expectations. That sent interest rates sharply higher. As it
turned out, the economy expanded at an annualized rate of 2.2% during the
first quarter - very close to the Fed's target pace for sustainable,
non-inflationary growth. Throughout the spring and early summer, a stream
of positive economic indicators pushed interest rates steadily higher. Not
surprisingly, the estimated second-quarter growth rate was even faster, at
4.2%.
Q. WHAT WAS YOUR STRATEGY DURING THE PERIOD?
A. The fund's average maturity at the beginning of the period was around 50
days, which I would characterize as neutral. Often when interest rates are
falling, I think it makes sense to lock in current rates by extending the
fund's average maturity. However, I wanted to preserve some flexibility in
the face of a fast-changing market. In retrospect, that served the fund
well when rates began climbing. I didn't extend the fund's average maturity
until after the February employment report came out in early March. As
often happens with the release of dramatic news, the market overreacted,
creating buying opportunities among longer-term securities. Purchase of
these securities brought the fund's average maturity to close to 60 days,
where it remained through the end of the period.
Q. HOW DID THE FUND PERFORM?
A. The fund's seven-day yield on July 31, 1996, was 3.04%, compared to
2.83% six months ago. On an after-tax basis, that was the equivalent of a
5.40% taxable rate for Massachusetts investors in the 43.68% combined state
and federal income tax bracket. Through July 31, 1996, the fund's six-month
total return was 1.44%, compared to 1.40% for the Massachusetts tax-free
money market funds average, according to IBC Financial Data, Inc.
Q. WHAT'S THE OUTLOOK?
A. Recent signs suggest that the economy is stronger than expected,
decreasing the possibility of further rate cuts and creating additional
buying opportunities for the fund. The fund's average maturity will be
contingent upon the types of opportunities available in the market.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND
OTHER CONDITIONS.
FUND FACTS
GOAL: high current tax-free
income for Massachusetts
residents while maintaining
a stable $1.00 share price
START DATE: March 4, 1991
SIZE: as of July 31, 1996,
over $594 million
MANAGER: Janice Bradburn,
since January 1992; also
manager, various Fidelity
and Spartan state municipal
money market funds; joined
Fidelity in 1989
(checkmark)
WORDS TO KNOW
COMMERCIAL PAPER: A security
issued by a municipality to
finance capital or operating
needs.
FEDERAL FUNDS RATE: The interest
rate banks charge each other
for overnight loans.
MATURITY: The time remaining
before an issuer is scheduled
to repay the principal amount
on a debt security. When the
fund's average maturity -
weighted by dollar amount -
is short, the fund manager is
anticipating a rise in interest
rates. When the average
maturity is long, the manager
is expecting rates to fall.
When the average maturity is
neutral, the manager wants
the flexibility to respond to
rising rates, while still
capturing a portion of the
higher yields available from
issues with longer maturities.
MUNICIPAL NOTE: A security
issued in advance of future
tax or other revenues and
payable from those specific
sources.
TENDER BOND: A variable-rate,
long-term security that gives
the bond holder the option to
redeem the bond at face value
before maturity.
VARIABLE RATE DEMAND NOTE
(VRDN): A tender bond that
can be redeemed on short
notice, typically one or seven
days. VRDNs are useful in
managing the fund's average
maturity and liquidity.
INVESTMENT CHANGES
MATURITY DIVERSIFICATION
DAYS % OF FUND ASSETS % OF FUND ASSETS % OF FUND ASSETS
7/31/96 1/31/96 7/31/95
0 - 30 70 67 76
31 - 90 12 9 10
91 - 180 3 17 2
181 - 397 15 7 12
WEIGHTED AVERAGE MATURITY
7/31/96 1/31/96 7/31/95
Spartan Massachusetts
Municipal Money Market Fun 59 days 52 days 49 days
d
Massachusetts Tax-Free
Money Market Funds
Average * 58 days 52 days 48 days
ASSET ALLOCATION
AS OF JULY 31, 1996 AS OF JANUARY 31, 1996
Row: 1, Col: 1, Value: 55.0
Row: 1, Col: 2, Value: 23.0
Row: 1, Col: 3, Value: 2.0
Row: 1, Col: 4, Value: 16.0
Row: 1, Col: 5, Value: 4.0
Row: 1, Col: 1, Value: 54.0
Row: 1, Col: 2, Value: 19.0
Row: 1, Col: 3, Value: 3.0
Row: 1, Col: 4, Value: 19.0
Row: 1, Col: 5, Value: 5.0
Variable rate
demand notes
(VRDNs) 55%
Commercial
paper 23%
Tender bonds 2%
Municipal
notes 16%
Other 4%
Variable rate
demand notes
(VRDNs) 54%
Commercial
paper 19%
Tender bonds 3%
Municipal
notes 19%
Other 5%
* SOURCE: IBC'S MONEY FUND REPORT(registered trademark)
INVESTMENTS JULY 31, 1996 (UNAUDITED)
Showing Percentage of Total Value of Investments
MUNICIPAL SECURITIES (A) - 100%
PRINCIPAL VALUE
AMOUNT (NOTE 1)
MASSACHUSETTS - 96.3%
Andover BAN:
3.80% 12/20/96 $ 1,000,000 $ 1,000,372
4% 12/20/96 1,900,000 1,902,502
Andover Gen. Oblig. Bonds 7.25% 11/15/96 1,200,000 1,211,992
Arlington Gen. Oblig. Bonds 4.75% 12/1/96 800,000 802,984
Attleboro Gen. Oblig. Bonds 6.80% 12/1/96
(AMBAC Insured) 775,000 782,787
Boston Gen. Oblig. Bonds Series 1995 A, 5% 10/1/96
(MBIA insured) 4,000,000 4,007,501
Boston Wtr. & Swr. Commission Gen. Oblig. Rev, VRDN.:
Series 1985 A, 3.10%, LOC Canadian Imperial
Bank of Commerce 15,805,000 15,805,000
Series 1994 A, 3.25%, LOC State Street
Bank & Trust Co. 7,600,000 7,600,000
Boston Wtr. & Swr. Participating VRDN, Series 1996
SG-75, 3.70% (Liquidity Facility Societe Generale) (c) 5,100,000
5,100,000
Boxborough BAN 4.50% 7/11/97 2,749,241 2,764,180
Braintree BAN 3.90% 12/20/96 700,000 700,739
Bridgewater BAN 4% 11/19/96 1,600,000 1,601,425
Brockton BAN 4.40% 4/11/97 (BPA Fleet Nat'l. Bank) 3,600,000 3,613,320
Cambridge Gen. Oblig. Bonds Series 1996, 4.25% 6/15/97 705,000 707,373
Chelmsford BAN 4.25% 4/24/97 900,000 902,984
Clipper Participating VRDN, Series 93-2, 3.56%
(Liquidity Facility State Street Bank & Trust Co.) (c) 15,630,200
15,630,200
Danvers BAN 4.50% 7/18/97 2,550,000 2,559,418
Edgartown BAN 3.75% 8/6/96 700,000 700,033
Holyoke Poll. Cont. Rev. (Holyoke Pwr. & Light Proj.)
Series 1988, 3.30%,
LOC Union Bank of Switzerland, VRDN 3,400,000 3,400,000
Mashpee BAN:
3.75% 2/7/97 1,000,000 1,000,218
4% 2/7/97 2,840,000 2,844,277
4.25% 2/7/97 890,000 892,456
Massachusetts Bay Transit Auth. Series C, CP:
3.65% 9/6/96, LOC Westdeutsche Landesbanken 1,000,000 1,000,000
3.55% 10/10/96, LOC Westdeutsche Landesbanken 7,700,000 7,700,000
3.60% 10/16/96, LOC Westdeutsche Landesbanken 1,500,000 1,500,000
Massachusetts Bay Trans. Auth.:
Bonds:
Series 1989 A, 6.75% 3/1/97 1,175,000 1,195,324
RAN:
Series 1995 B, 4.75% 9/6/96 10,700,000 10,707,899
Series 1996 A, 3.75% 2/28/97 8,700,000 8,697,049
Massachusetts Ed. Fin. Auth. Ed. Loan Rev.
Series 1996 E, 3.35% (b) 16,500,000 16,500,000
Massachusetts Gen. Oblig.:
BAN Series 1996 A, 4.25% 6/10/97 27,445,000 27,527,887
Bonds Series 1996 A, 5% 1/1/97 2,740,000 2,755,592
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
MASSACHUSETTS - CONTINUED
Massachusetts Gen. Oblig.: - continued
Participating VRDN (c):
Series CR-159, 3.67% (Liquidity Facility Citibank) $ 4,100,000 $
4,100,000
Series 30-I, 3.70%
(AMBAC Insured) (Liquidity Facility Citibank) 6,000,000 6,000,000
Series 93-I, 3.72% (Liquidity Facility Citibank) 7,800,000 7,800,000
Series 1996 SG-38, 3.70% (MBIA Insured)
(Liquidity Facility Societe Generale) 2,000,000 2,000,000
Tender Option Ctfs. Series CR-147, 3.72%
(Liquidity Facility Citibank) (c) 3,000,000 3,000,000
Massachusetts Health & Ed. Facs. Auth.
Participating VRDN, Series SG-27, 3.70%
(Liquidity Facility Societe Generale) (c) 3,935,000 3,935,000
Massachusetts Health & Ed. Facs. Auth. Rev.:
VRDN:
(Capital Asset Prog.):
Series 1985 D, 3.70% (MBIA Insured)
(BPA Sanwa Bank Ltd.) 12,100,000 12,100,000
Series A, 3.30%, LOC First Nat'l. Bank of Chicago 12,300,000
12,300,000
Series E, 3.60%, LOC First Nat'l. Bank of Chicago 2,200,000 2,200,000
Series G1, 3.30% (MBIA Insured)
(BPA Credit Suisse) 1,700,000 1,700,000
(Falmouth Assisted Living) Series 1995, 3.35%,
LOC Bank of Boston 2,200,000 2,200,000
(Harvard Univ.) Series I, 3.50% 19,871,000 19,871,000
(Massachusetts Institute of Technology)
Series G, 3.35% 7,500,000 7,500,000
(Mount Ida College) 3.40%, LOC Chemical Bank 2,800,000 2,800,000
(Newton Wellesley Hosp.) 3.25% (MBIA Insured)
(Liquidity Facility Credit Suisse) 7,400,000 7,400,000
(Wellesley College) Issue B, 3.25% 6,500,000 6,500,000
(Williams College) Series E, 3.30% 2,205,000 2,205,000
Bonds:
(Boston Univ.) Series H, 3.65%, tender 8/22/96,
LOC Landesbank Hessen-Thuringen 7,200,000 7,200,000
(Harvard University):
3.55%, tender 10/15/96 1,500,000 1,500,000
3.60%, tender 10/21/96 2,000,000 2,000,000
Massachusetts Hsg. Fin. Agcy. Multi-Family Hsg. Rev., VRDN:
Rfdg. Series 1995 A, 3.45%, LOC Republic
Bank of New York 32,200,000 32,200,000
Series 1995 A, 3.45% 4,300,000 4,300,000
(Princeton Crossing Proj.) Series 1996, 3.65%,
LOC GE Capital Corp. (b) 8,700,000 8,700,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
MASSACHUSETTS - CONTINUED
Massachusetts Hsg. Fin. Agcy. Participating VRDN (c):
Series PT-33, 3.70% (AMBAC Insured)
(Liquidity Facility Industrial Bank of Japan) (b) $ 1,500,000 $ 1,500,000
Series PT-42, 3.55% (Liquidity Facility Industrial
Bank of Japan) 3,905,000 3,905,000
Series 13-C, 3.40% (AMBAC Insured) (Liquidity Facility
Morgan Guaranty Trust Co.) 3,600,000 3,600,000
Massachusetts Hsg. Fin. Agcy. Single Family Hsg. Rev. Bonds
Series 50, 3.70%, tender 6/2/97 2,000,000 2,000,000
Massachusetts Ind. Fin. Auth. Ind. Dev. Rev., VRDN:
Rfdg.:
(First Healthcare Corp. Proj.) Series 1992 B, 3.65%,
LOC Wachovia Bank of Georgia 1,130,000 1,130,000
(First Healthcare Corp. for Hillhaven Proj.) 3.65%,
LOC Wachovia Bank of Georgia 1,195,000 1,195,000
(Quamco Inc. Proj.):
Series 1988 A, 3.35%, LOC Bank of Nova Scotia 2,095,000 2,095,000
Series 1988 B, 3.35%, LOC Bank of Nova Scotia 725,000 725,000
(Nova Realty) Series 1994, 3.55%
LOC Bank of Boston 2,000,000 2,000,000
(Nutramax Products) (b):
Series 1996 B, 3.60%, LOC State Street Bank & Trust Co. 1,000,000
1,000,000
3.60%, LOC State Street Bank & Trust Co. 1,100,000 1,100,000
(Signature Mondial Inc.) Series 1996, 3.60%,
LOC Fleet Nat'l Bank (b) 2,200,000 2,200,000
(United Medical Corp.) Series 1992, 3.55%,
LOC Chemical Bank (b) 1,400,000 1,400,000
Massachusetts Ind. Fin. Agcy. Dev. Rev., VRDN (b):
(Hazen Paper Proj.) Series1996, 3.70%, LOC Bank of Boston 1,000,000
1,000,000
Series 1996, 3.70%, LOC Bank of Boston 1,300,000 1,300,000
Massachusetts Ind. Fin. Agcy. Participating VRDN,
Series 1996 SG-56, 3.70% (MBIA Insured)
(Liquidity Facility Societe Generale) (c) 5,025,000 5,025,000
Massachusetts Ind. Fin. Agcy. Poll. Cont. Rev.
(Holyoke Wtr. Pwr. Co. Proj.) Series 1990, 3.35%,
LOC Swiss Bank, VRDN (b) 2,600,000 2,600,000
Massachusetts Ind. Fin. Agcy. Poll. Cont. Rev. Rfdg. Bonds:
(New England Pwr. Co. Proj.):
Series 1992 B:
3.55%, tender 8/14/96 2,000,000 2,000,000
3.55%, tender 8/15/96 4,000,000 4,000,000
3.65%, tender 9/27/96 1,500,000 1,500,000
3.70%, tender 10/22/96 3,000,000 3,000,000
Series 1993 A:
3.60%, tender 8/12/96 4,500,000 4,500,000
3.50%, tender 8/26/96 5,800,000 5,800,000
Series 1993 B:
3.60%, tender 8/13/96 500,000 500,000
3.65%, tender 8/14/96 4,500,000 4,500,000
3.65%, tender 9/18/96 2,000,000 2,000,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
MASSACHUSETTS - CONTINUED
Massachusetts Ind. Fin. Agcy. Poll. Cont. Rev. Rfdg. Bonds:
(New England Pwr. Co. Proj.): - continued
Series 1993 B: - continued
3.40%, tender 8/21/96 $ 3,350,000 $ 3,350,000
3.50%, tender 8/26/96 2,600,000 2,600,000
3.45%, tender 8/27/96 2,800,000 2,800,000
3.65%, tender 8/30/96 1,000,000 1,000,000
Massachusetts Ind. Fin. Agcy. Resource Recovery Rev., VRDN:
(Ogden-Haverhill Proj.):
Series 1992 A, 3.25%,
LOC Union Bank of Switzerland 2,395,000 2,395,000
Series 1986 B, 3.30%,
LOC Union Bank of Switzerland (b) 8,750,000 8,750,000
Massachusetts Ind. Fin. Agcy. Rev., VRDN:
Rfdg.(WGBH Ed. Foundation Proj.) Series 1992, 3.40%,
LOC Nat'l. Westminster Bank 2,305,000 2,305,000
(Bradford College) Series 1995 A, 3.50%,
LOC Bank of Boston 1,000,000 1,000,000
(Edgewood Retirement Community) Series 1995 C, 3.50%,
LOC Dresdner Bank 3,000,000 3,000,000
(General Signal Proj.) 3.50%,
LOC Wachovia Bank of Georgia 3,000,000 3,000,000
(Mary Ann Morse Nursing Home):
Series A, 3.80%, LOC Shawmut Bank 3,200,000 3,200,000
3.25%, LOC Shawmut Bank 4,600,000 4,600,000
(Riverdale Mills Corp.) Series 1995, 3.70%,
LOC Bank of Boston (b) 2,100,000 2,100,000
Massachusetts Muni. Wholesale Elec. Co.
Pwr. Supply Sys. Rev.:
Series 1994 C, 3.60%,
LOC Canadian Imperial Bank, VRDN 10,200,000 10,200,000
Series A, 8.75% 7/1/97 5,400,000 5,736,817
Massachusetts Port Auth. Series 1996, CP:
3.65% 1/21/97,
LOC Canadian Imperial Bank of Commerce 4,500,000 4,500,000
3.65% 2/26/97,
LOC Canadian Imperial Bank of Commerce 17,400,000 17,400,000
Massachusetts Port Auth. Rev., VRDN:
Series 1995 A, 3.55%,
LOC Landesbanken Hessen Thuringen 800,000 800,000
Series 1995 B, 3.70%,
LOC Landesbanken Hessen-Thuringen (b) 21,780,000 21,780,000
Massachusetts Single Family Hsg. Auth. Rev. Bonds
3.60%, tender 9/1/96 (AMBAC Insured)
(Liquidity Facility Citibank) (b) (c) (d) 5,100,000 5,100,000
Massachusetts Tpk. Auth. Participating VRDN, Series PA-26,
3.55% (Liquidity Facility Merrill Lynch & Co.) (c) 3,360,000 3,360,000
Massachusetts Wtr. Poll. Abatement Rev. Bonds
(New Bedford Loan Prog.) Series 1996 A, 4.25% 2/1/97 2,000,000 2,005,538
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
MASSACHUSETTS - CONTINUED
Massachusetts Wtr. Resource Auth.:
Participating VRDN (c):
Series 1995 SG-17, 3.70% (AMBAC Insured)
(Liquidity Facility Societe Generale) $ 2,800,000 $ 2,800,000
Participating VRDN (c):
Series 1996, SG-63 3.70%
(Liquidity Facility Societe Generale) 1,000,000 1,000,000
CP:
3% 8/6/96, LOC Morgan Guaranty Trust Co. 3,000,000 3,000,000
3.65% 8/7/96, LOC Morgan Guaranty Trust Co. 3,600,000 3,600,000
3.65% 8/8/96, LOC Morgan Guaranty Trust Co. 6,500,000 6,500,000
3.60% 8/13/96, LOC Morgan Guaranty Trust Co. 1,100,000 1,100,000
3.70% 8/15/96, LOC Morgan Guaranty Trust Co. 1,500,000 1,500,000
3.60% 8/16/96, LOC Morgan Guaranty Trust Co. 3,000,000 3,000,000
3.60% 8/20/96, LOC Morgan Guaranty Trust Co. 1,600,000 1,600,000
3.50% 8/21/96, LOC Morgan Guaranty Trust Co. 2,000,000 2,000,000
3.60% 8/23/96, LOC Morgan Guaranty Trust Co. 3,800,000 3,800,000
3.50% 8/27/96, LOC Morgan Guaranty Trust Co. 2,000,000 2,000,000
3.50% 9/16/96, LOC Morgan Guaranty Trust Co. 5,000,000 5,000,000
3.65% 9/18/96, LOC Morgan Guaranty Trust Co. 2,500,000 2,500,000
3.60% 9/23/96, LOC Morgan Guaranty Trust Co. 2,500,000 2,500,000
3.60% 10/15/96, LOC Morgan Guaranty Trust Co. 4,000,000 4,000,000
3.65% 10/22/96, LOC Morgan Guaranty Trust Co. 4,000,000 4,000,000
3.65% 10/24/96, LOC Morgan Guaranty Trust Co. 3,400,000 3,400,000
3.65% 10/29/96, LOC Morgan Guaranty Trust Co. 4,250,000 4,250,000
Methuen BAN 3.70% 12/6/96 1,000,000 1,000,335
Natick BAN:
4% 8/8/96 2,420,000 2,420,166
4.50% 8/8/97 3,700,000 3,721,349
New Bedford BAN 4.50% 10/11/96 (BPA Fleet Nat'l. Bank) 1,600,000
1,602,434
Northampton Bonds 7.50% 12/1/96 (AMBAC Insured) 525,000 531,293
Northhampton BAN 4.10% 5/30/97 2,225,000 2,232,107
Pioneer Valley RAN 4.25% 8/9/96,
LOC State Street Bank & Trust Co. 4,000,000 4,000,205
Randolph Gen. Oblig. Bonds 5.45% 9/15/96
(AMBAC Insured) 819,000 820,710
Sharon Gen. Oblig. Bonds 4.45% 12/1/96 358,000 359,102
Springfield BAN:
4.25% 8/30/96 (BPA Fleet Nat'l. Bank) 1,400,000 1,400,820
4.25% 2/14/97 (BPA Fleet Nat'l. Bank) 2,100,000 2,104,925
Tewksbury Gen. Oblig. Bonds 4.90% 11/15/96
(AMBAC Insured) 370,000 371,569
Walpole BAN 4% 6/4/97 2,000,000 2,005,350
Worcester BAN 4.25% 8/29/96,
LOC State Street Bank & Trust Co. 7,700,000 7,701,405
573,003,637
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
PUERTO RICO - 3.7%
Puerto Rico Commonwealth Pub. Impt.
Participating VRDN, Series PT-63, 3.40%
(Liquidity Facility Bayerische Hypotheken) (c) $ 2,900,000 $ 2,900,000
Puerto Rico Elec. Pwr. Auth. Participating VRDN,
Series BT-105, 3.525% (Liquidity Facility
Bankers Trust Co.) (c) 7,068,600 7,068,600
Puerto Rico Gov't. Dev. Bank, CP:
3.15% 8/1/96 9,000,000 9,000,000
3.65% 9/25/96 3,200,000 3,200,000
22,168,600
TOTAL INVESTMENTS - 100% $ 595,172,237
Total Cost for Income Tax Purposes $ 595,172,622
SECURITY TYPE ABBREVIATIONS
BAN - Bond Anticipation Notes
CP - Commercial Paper
RAN - Revenue Anticipation Notes
VRDN - Variable Rate Demand Notes
LEGEND
(a) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
(b) Private activity obligations whose interest is subject to the federal
alternative minimum tax for individuals.
(c) Provides evidence of ownership in one or more underlying municipal
bonds.
(d) Restricted securities - Investment in securities not registered under
the Securities Act of 1933 (see Note 2 of Notes to Financial Statements).
Additional information on each holding is as follows:
ACQUISITION ACQUISITION
SECURITY DATE COST
Massachusetts
Single Family Hsg.
Auth. Bonds 12/1/95 $ 5,100,000
INCOME TAX INFORMATION
At January 31, 1996, the fund had a capital loss carryforward of
approximately $16,000 of which $8,000 and $8,000 will expire on January 31,
2003 and 2004, respectively.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
JULY 31, 1996 (UNAUDITED)
ASSETS
Investment in securities, at value - $ 595,172,237
See accompanying schedule
Cash 27,802
Receivable for investments sold 1,000,541
Interest receivable 3,593,005
TOTAL ASSETS 599,793,585
LIABILITIES
Payable for investments purchased $ 3,721,349
Share transactions in process 1,095,865
Distributions payable 28,117
Accrued management fee 242,182
TOTAL LIABILITIES 5,087,513
NET ASSETS $ 594,706,072
Net Assets consist of:
Paid in capital $ 594,755,126
Accumulated net realized gain (loss) on investments (49,411)
Unrealized gain from accretion of market discount 357
NET ASSETS, for 594,753,701 shares outstanding $ 594,706,072
NET ASSET VALUE, offering price and redemption price $1.00
per share ($594,706,072 (divided by) 594,753,701 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED JULY 31, 1996 (UNAUDITED)
INTEREST INCOME $ 8,845,760
EXPENSES
Management fee $ 1,309,049
Non-interested trustees' compensation 1,064
Total expenses before reductions 1,310,113
Expense reductions (15,682) 1,294,431
NET INTEREST INCOME 7,551,329
REALIZED AND UNREALIZED GAIN (LOSS) (34,997)
Net realized gain (loss) on investment securities
Increase (decrease) in net unrealized gain from 357
accretion of market discount
NET GAIN (LOSS) (34,640)
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 7,516,689
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS YEAR ENDED
ENDED JULY 31, JANUARY 31,
1996 1996
(UNAUDITED)
INCREASE (DECREASE) IN NET ASSETS
Operations $ 7,551,329 $ 15,084,284
Net interest income
Net realized gain (loss) (34,997) (7,534)
Increase (decrease) in net unrealized gain from 357 -
accretion of market discount
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 7,516,689 15,076,750
FROM OPERATIONS
Distributions to shareholders from net interest income (7,551,329) (15,084,284)
Share transactions at net asset value of $1.00 per share 368,296,443 630,560,707
Proceeds from sales of shares
Reinvestment of distributions from net interest income 7,418,999 14,773,809
Cost of shares redeemed (295,466,457) (537,122,656)
NET INCREASE (DECREASE) IN NET ASSETS AND SHARES 80,248,985 108,211,860
RESULTING FROM SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS 80,214,345 108,204,326
NET ASSETS
Beginning of period 514,491,727 406,287,401
End of period $ 594,706,072 $ 514,491,727
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SIX MONTHS YEARS ENDED JANUARY 31, SIX MONTHS YEAR ENDED MARCH 4, 1991
ENDED ENDED JULY 31, (COMMENCEME
JULY 31, 1996 JANUARY 31, NT OF
OPERATIONS) TO
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
(UNAUDITED) 1996 1995 1994 1993 1992 JULY 31, 1991
SELECTED PER-SHARE DATA
Net asset value, beginning of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
Income from Investment Operations .014 .033 .024 .019 .012 .034 .017
Net interest income
Less Distributions (.014) (.033) (.024) (.019) (.012) (.034) (.017)
From net interest income
Net asset value, end of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
TOTAL RETURN B 1.44% 3.32 2.42 1.95% 1.23% 3.45% 1.71%
% %
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 594,706 $ 514,492 $ 406,287 $ 346,880 $ 333,655 $ 278,369 $ 122,114
Ratio of expenses to average net assets .50% A .50 .50 .40% .17% A, .05% .00% C
% % C C C
Ratio of expenses to average net assets
after .49% A, .50 .50 .40% .17% A .05% .00%
expense reductions D % %
Ratio of net interest income to average
net assets 2.88% A 3.27 2.40 1.93% 2.44% A 3.29% 4.17% A
% %
</TABLE>
A ANNUALIZED
B TOTAL RETURNS DO NOT INCLUDE THE ACCOUNT CLOSEOUT FEE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT ANNUALIZED. THE TOTAL RETURNS WOULD HAVE BEEN
LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN.
C FMR AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO WOULD HAVE
BEEN HIGHER.
D FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES
WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES (SEE NOTE 4 OF
NOTES TO FINANCIAL STATEMENTS).
NOTES TO FINANCIAL STATEMENTS
For the period ended July 31, 1996 (Unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES.
Spartan Massachusetts Municipal Money Market Fund (the fund) is a fund of
Fidelity Massachusetts Municipal Trust (the trust) and is authorized to
issue an unlimited number of shares. The trust is registered under the
Investment Company Act of 1940, as amended (the 1940 Act), as an open-end
management investment company organized as a Massachusetts business trust.
The financial statements have been prepared in conformity with generally
accepted accounting principles which permit management to make certain
estimates and assumptions at the date of the financial statements. The
following summarizes the significant accounting policies of the fund:
SECURITY VALUATION. As permitted under Rule 2a-7 of the 1940 Act, and
certain conditions therein, securities are valued initially at cost and
thereafter assume a constant amortization to maturity of any discount or
premium.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, the fund is not subject to income taxes to
the extent that it distributes substantially all of its taxable income for
its fiscal year. The schedule of investments includes information regarding
income taxes under the caption "Income Tax Information."
INTEREST INCOME. Interest income, which includes amortization of premium
and accretion of original issue discount, is accrued as earned. Accretion
of market discount represents unrealized gain until realized at the time of
a security disposition or maturity.
EXPENSES. Most expenses of the trust can be directly attributed to a fund.
Expenses which cannot be directly attributed are apportioned between the
funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Dividends are declared daily and paid
monthly from net interest income.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
2. OPERATING POLICIES.
RESTRICTED SECURITIES. The fund is permitted to invest in securities that
are subject to legal or contractual restrictions on resale. These
securities generally may be resold in transactions exempt from registration
or to the public if the securities are registered. Disposal of these
securities may involve time-consuming negotiations and expense, and prompt
sale at an acceptable price may be difficult. At the end of the period,
restricted securities (excluding 144A issues) amounted to $5,100,000 or
0.9% of net assets.
3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, Fidelity Management &
Research Company (FMR) pays all expenses, except the compensation of the
non-interested Trustees and certain exceptions such as interest, taxes,
3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
MANAGEMENT FEE - CONTINUED
brokerage commissions and extraordinary expenses. FMR receives a fee that
is computed daily at an annual rate of .50% of the fund's average net
assets.
FMR also bears the cost of providing shareholder services to the fund. To
offset the cost of providing these services, FMR or its affiliates collect
certain transaction fees from the fund's shareholders which amounted to
$3,452 for the period.
SUB-ADVISER FEE. As the fund's investment sub-adviser, FMR Texas Inc., a
wholly owned subsidiary of FMR, receives a fee from FMR of 50% of the
management fee payable to FMR. The fee is paid prior to any voluntary
expense reimbursements which may be in effect.
4. EXPENSE REDUCTIONS.
FMR has entered into arrangements on behalf of the fund with the fund's
custodian and transfer agent whereby interest earned on uninvested cash
balances was used to offset a portion of the fund's expenses. During the
period, the fund's expenses were reduced by $15,682 under these
arrangements.
TO CALL FIDELITY
FOR FUND INFORMATION AND QUOTES
The Fidelity Telephone Connection offers you special automated telephone
services for quotes and balances. The services are easy to use,
confidential and quick. All you need is a Touch Tone telephone.
YOUR PERSONAL IDENTIFICATION NUMBER
(PIN)
The first time you call one of our automated telephone services, we'll ask
you
to set up your Personal Identification
Number (PIN). The PIN assures that
only you have automated telephone
access to your account information.
Please have your Customer Number
(T-account #) handy when you call -
you'll need it to establish your PIN. If
you would ever like to change your PIN, just choose the "Change your
Personal
Identification Number" option when
you call. If you forget your PIN, please
call a Fidelity representative at 1-800-
544-6666 for assistance.
(PHONE_GRAPHIC)(PHONE_GRAPHIC)MUTUAL FUND QUOTES*
1-800-544-8544
Just make a selection from this record-ed menu:
PRESS
For quotes on funds you own.
1.
For an individual fund quote.
2.
For the ten most frequently
requested Fidelity fund quotes.
3.
For quotes on Fidelity Select
Portfolios(registered trademark).
4.
To change your Personal
Identification Number (PIN).
5.
To speak with a Fidelity
representative.
6.
(PHONE_GRAPHIC)(PHONE_GRAPHIC)MUTUAL FUND ACCOUNT
BALANCES 1-800-544-7544
Just make a selection from this record-
ed menu:
PRESS
For balances on funds you own.
1.
For your most recent fund activity
(purchases, redemptions, and
dividends).
2.
To change your Personal
Identification Number (PIN).
3.
To speak with a Fidelity
representative.
4.
* WHEN YOU CALL THE QUOTES LINE, PLEASE REMEMBER THAT A FUND'S YIELD AND
RETURN WILL
VARY AND, EXCEPT FOR MONEY MARKET FUNDS, SHARE PRICE WILL ALSO VARY. THIS
MEANS THAT
YOU MAY HAVE A GAIN OR LOSS WHEN YOU SELL YOUR SHARES. THERE IS NO
ASSURANCE THAT
MONEY MARKET FUNDS WILL BE ABLE TO MAINTAIN A STABLE $1 SHARE PRICE; AN
INVESTMENT IN
A MONEY MARKET FUND IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT.
TOTAL
RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN SHARE PRICE, REINVESTMENT OF
DIVIDENDS
AND CAPITAL GAINS, AND THE EFFECTS OF ANY SALES CHARGES.
TO VISIT FIDELITY
For directions and hours,
please call 1-800-544-9797.
ARIZONA
7373 N. Scottsdale Road
Scottsdale, AZ
CALIFORNIA
851 East Hamilton Avenue
Campbell, CA
527 North Brand Boulevard
Glendale, CA
19100 Von Karman Avenue
Irvine, CA
10100 Santa Monica Blvd.
Los Angeles, CA
811 Wilshire Boulevard
Los Angeles, CA
251 University Avenue
Palo Alto, CA
1760 Challenge Way
Sacramento, CA
7676 Hazard Center Drive
San Diego, CA
455 Market Street
San Francisco, CA
950 Northgate Drive
San Rafael, CA
1400 Civic Drive
Walnut Creek, CA
6300 Canoga Avenue
Woodland Hills, CA
COLORADO
1625 Broadway
Denver, CO
CONNECTICUT
265 Church Street
New Haven, CT
300 Atlantic Street
Stamford, CT
29 South Main Street
West Hartford, CT
DELAWARE
222 Delaware Avenue
Wilmington, DE
FLORIDA
4400 N. Federal Highway
Boca Raton, FL
90 Alhambra Plaza
Coral Gables, FL
4090 N. Ocean Boulevard
Ft. Lauderdale, FL
4001 Tamiami Trail, North
Naples, FL
1907 West State Road 434
Orlando, FL
2401 PGA Boulevard
Palm Beach Gardens, FL
8065 Beneva Road
Sarasota, FL
2000 66th Street, North
St. Petersburg, FL
GEORGIA
3525 Piedmont Road, N.E.
Atlanta, GA
1000 Abernathy Road
Atlanta, GA
HAWAII
700 Bishop Street
Honolulu, HI
ILLINOIS
215 East Erie Street
Chicago, IL
One North Franklin
Chicago, IL
540 Lake Cook Road
Deerfield, IL
1415 West 22nd Street
Oak Brook, IL
1700 East Golf Road
Schaumburg, IL
LOUISIANA
201 St. Charles Avenue
New Orleans, LA
MAINE
3 Canal Plaza
Portland, ME
MARYLAND
7401 Wisconsin Avenue
Bethesda, MD
1 West Pennsylvania Ave.
Towson, MD
MASSACHUSETTS
470 Boylston Street
Boston, MA
21 Congress Street
Boston, MA
25 State Street
Boston, MA
300 Granite Street
Braintree, MA
44 Mall Road
Burlington, MA
416 Belmont Street
Worcester, MA
MICHIGAN
280 North Woodward Ave.
Birmingham, MI
29155 Northwestern Hwy.
Southfield, MI
MINNESOTA
7600 France Avenue South
Edina, MN
MISSOURI
700 West 47th Street
Kansas City, MO
8885 Ladue Road
Ladue, MO
200 North Broadway
St. Louis, MO
NEW JERSEY
56 South Street
Morristown, NJ
501 Route 17, South
Paramus, NJ
505 Millburn Avenue
Short Hills, NJ
NEW YORK
1050 Franklin Avenue
Garden City, NY
999 Walt Whitman Road
Melville, L.I., NY
1271 Avenue of the
Americas
New York, NY
71 Broadway
New York, NY
350 Park Avenue
New York, NY
10 Bank Street
White Plains, NY
NORTH CAROLINA
4611 Sharon Road
Charlotte, NC
2200 West Main Street
Durham, NC
OHIO
600 Vine Street
Cincinnati, OH
28699 Chagrin Boulevard
Woodmere Village, OH
1903 East Ninth Street
Cleveland, OH
OREGON
121 S.W. Morrison Street
Portland, OR
PENNSYLVANIA
1735 Market Street
Philadelphia, PA
439 Fifth Avenue
Pittsburgh, PA
TENNESSEE
5100 Poplar Avenue
Memphis, TN
TEXAS
10000 Research Boulevard
Austin, TX
7001 Preston Road
Dallas, TX
1155 Dairy Ashford
Houston, TX
2701 Drexel Drive
Houston, TX
1010 Lamar Street
Houston, TX
400 East Las Colinas Blvd.
Irving, TX
14100 San Pedro
San Antonio, TX
UTAH
215 South State Street
Salt Lake City, UT
VERMONT
199 Main Street
Burlington, VT
VIRGINIA
8180 Greensboro Drive
McLean, VA
WASHINGTON
411 108th Avenue, N.E.
Bellevue, WA
511 Pine Street
Seattle, WA
WASHINGTON, DC
1775 K Street, N.W.
Washington, DC
WISCONSIN
595 North Barker Road
Brookfield, WI
INVESTMENT ADVISER
(registered trademark)
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISER
FMR Texas Inc.
Irving, TX
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
Janice Bradburn, Vice President
Fred L. Henning, Jr., Vice President
Arthur S. Loring, Secretary
Kenneth A. Rathgeber, Treasurer
Thomas D. Maher, Assistant
Vice President
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
Thomas J. Simpson, Assistant Treasurer
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox *
Phyllis Burke Davis *
Richard J. Flynn *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Edward H. Malone *
Marvin L. Mann *
Gerald C. McDonough *
Thomas R. Williams *
ADVISORY BOARD
William O. McCoy
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENTS
UMB Bank, n.a.
Kansas City, MO
and
Fidelity Service Co.
Boston, MA
CUSTODIAN
UMB Bank, n.a.
Kansas City, MO
FIDELITY'S MUNICIPAL
MONEY MARKET FUNDS
California Municipal Money Market
Connecticut Municipal Money Market
Massachusetts Municipal Money Market
Michigan Municipal Money Market
New Jersey Municipal Money Market
New York Municipal Money Market
Ohio Municipal Money Market
Spartan Arizona Municipal Money Market
Spartan California Municipal
Money Market
Spartan Connecticut Municipal
Money Market
Spartan Florida Municipal Money Market
Spartan Massachusetts Municipal
Money Market
Spartan Municipal Money Fund
Spartan New Jersey Municipal
Money Market
Spartan New York Municipal
Money Market
Spartan Pennsylvania Municipal
Money Market
Tax-Exempt Money Market
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Account Balances 1-800-544-7544
Exchanges/Redemptions 1-800-544-7777
Mutual Fund Quotes 1-800-544-8544
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774 (8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
* INDEPENDENT TRUSTEES
AUTOMATED LINES FOR QUICKEST SERVICE
